| Course | FNCE 4103 International Finance |
|---|---|
| Week | Week 1 |
| Paper type | Discussion post |
| Length | About 520 words, 3 pages |
| Format | Discussion post, APA 7 citations |
| School | Walden University |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for FNCE 4103 Week 1
Week 1 Discussion: What Makes International Finance Different
One Euro Invoice for German Pumps: Why a Minneapolis Manufacturer's €2 Million Payable Is a Different Problem From the Same Purchase Made in Dollars
Lakeland Process Equipment, a composite Minneapolis maker of food-processing lines, has ordered industrial pumps from a German supplier. The contract fixes the price at €2,000,000, invoiced in euros, payable in 90 days. Nothing about the pumps or the payment terms is unusual. What makes this an international finance problem is that one fact in the contract is fixed in a currency Lakeland does not earn.
Suppose instead that the supplier were in Ohio and invoiced $2,170,000, payable in 90 days. Lakeland would know its cost today to the cent. With the euro invoice, Lakeland knows only that it owes €2,000,000. Its dollar cost depends on the exchange rate on the day it pays, and nobody knows that rate now. Shapiro and Hanouna (2019) describe this as the defining feature of international financial management: cash flows are fixed in one currency and measured in another.
The conversion happens at settlement, when Lakeland's bank sells it euros for dollars. At an illustrative spot rate of $1.0850 per euro, the invoice would cost $2,170,000 today. If the euro rose 5 percent before settlement, to about $1.14, the same invoice would cost about $2,279,000, roughly $109,000 more than planned, which would wipe out much of the margin on the production line the pumps are for. If the euro fell, Lakeland would gain. That uncertainty is what the course calls transaction exposure (Madura, 2021). It is different in kind from the ordinary risks of buying equipment, such as late delivery or a defect, because it has nothing to do with the pumps or the supplier; it comes entirely from the currency the contract is written in. Even a perfectly run purchase can cost more than planned.
What I do not yet know is whether Lakeland should try to remove the uncertainty or accept it. Its sales are all in dollars, which argues for locking in the cost, but hedging has a price. I would ask classmates: in your experience, do smaller firms hedge payables like this one, or do they simply absorb the swings?
Reply to Felipe
Felipe, your example of a coffee importer paying in Colombian pesos is a good one, and you made a point I missed: the supplier, not the buyer, chose the invoice currency. Do you think Lakeland could have negotiated to be invoiced in dollars, and if so, what would the German supplier have charged for taking the currency risk itself? Levich (2001) notes that the choice of invoice currency simply moves the exposure from one party to the other.
Reply to Hannah
Hannah, you argued that a company with euro sales as well as euro costs has no currency problem. That is partly right: if the amounts and dates match, gains on one side offset losses on the other. But the timing rarely matches exactly. If the euro costs come due in March and the euro sales arrive in June, the firm is exposed for three months in between. Does your example company have matched dates, or just matched currencies?
References
Levich, R. M. (2001). International financial markets: Prices and policies (2nd ed.). McGraw-Hill.
Madura, J. (2021). International financial management (14th ed.). Cengage Learning.
Shapiro, A. C., & Hanouna, P. (2019). Multinational financial management (11th ed.). Wiley.
What the FNCE 4103 Week 1 instructions ask for
In Week 1 you explain what makes international finance different, using one transaction rather than a general essay. Describe a specific cross-border deal with its amount, currency and payment date. Then show the same deal without the border, so the difference is visible instead of asserted. Name the moment when currencies are converted and give a dated or illustrative rate, then size the exposure for a plausible move. Close by stating what you do not yet know and asking classmates a question. Keep it near four hundred words. In replies, ask who chose the invoice currency or whether timing actually matches.
How the FNCE 4103 Week 1 example is put together
The post introduces the pump purchase and the euro invoice. The second paragraph imagines an Ohio supplier invoicing in dollars and contrasts a known cost with an unknown one, citing Shapiro and Hanouna. The third paragraph converts at $1.0850 and shows a 5 percent rise adding about $109,000, explains why that risk is different from ordinary purchasing risks and names it transaction exposure, citing Madura. A closing question asks whether smaller firms hedge. The reply to Felipe notes that the supplier chose the currency and cites Levich on how invoicing moves exposure; the reply to Hannah explains why matched currencies with mismatched dates still leave a gap.
Reading the FNCE 4103 Week 1 rubric
Opening posts are judged on whether they make the international difference concrete. A single, specific transaction with an amount, currency and date earns more than a general description of global business. The strongest posts contrast the deal with a domestic version so the source of risk is clear, then size the exposure with a rate and a plausible move. Naming the concept correctly, transaction exposure, and citing a source shows engagement with the reading. Admitting what remains undecided, such as whether to hedge, sets up later weeks. Replies earn credit for raising a point the classmate missed, such as who bears the risk by choosing the invoice currency. Accurate arithmetic on the exposure matters even in a discussion post, because classmates will build on the figure.
FNCE 4103 Week 1 help from the desk
Think of a purchase or sale that crosses a border, either from your work or invented with realistic figures. Write the contract terms: amount, currency, payment date. Then imagine the same deal with a domestic supplier and ask what you would know today that you do not know now. That gap is the point of the post. Pick a rate and work out what a 5 or 10 percent move would cost in your home currency. Common weaknesses are general statements about globalization and posts with no numbers. Others confuse the exposure with ordinary business risk. Tell us about your transaction, and we can help you size it. Keep the post to one deal so classmates can respond to something specific.
Get a FNCE 4103 Week 1 example written to your instructions
Post requirements differ by section, so the Week 1 prompt, the discussion rubric and any assigned case should travel together. The sample thread is then built on one specified transaction, and the replies are written to the count your section requires. Nothing is owed for the first one, which arrives in 24 to 48 hours.
More FNCE 4103 papers and BS in Business Administration samples
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FNCE 4103 Week 1 questions, answered
Where can I find a free FNCE 4103 Week 1 sample paper?
The pump-payable post and both replies are reproduced here, open to all.
What transaction does the FNCE 4103 Week 1 post use?
A Minneapolis manufacturer's €2,000,000 payable to a German pump supplier, due in 90 days.
What makes it international?
The cost is fixed in euros but the company earns dollars, so its dollar cost is unknown until it pays.
How large is the exposure?
At $1.0850 the invoice costs $2,170,000; a 5 percent euro rise would add about $109,000.
What do the replies add?
That the supplier's choice of invoice currency moves the risk, and that matched currencies still leave exposure if dates differ.