On January 1, a German company purchased merchandise from a U.S. firm for \(\$ 50,000\), payable on March 1. The exchange rate for the euro on January 1 was \(\$ 1.10\). If the exchange rate increases to \(\$ 1.12\) on March 1 , what amount of gain or loss would the U.S. firm report related to currency fluctuations?

a. \(\$ 1,000\) gain.

b. \(\$ 1,000\) loss.

c. \(\$ 500\) gain.

d. No gain or loss would be reported.