12. On October 1, Boeing received an order from British Airways for a 747 for $200,000,000 to be paid on December 1. The exchange rates for $1 U.S. are as follows:

	Exchange Rates
	of $1 for British Pounds
Spot rate, October 1	.70
Spot rate, December 1 Forward rate, December 1	.68 .71

Required:

If British Airways decided to hedge $150,000,000 and self insure the balance, what gain or loss would the company record on its books for the purchase of the 747?

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13. On June 1, Dow Chemical purchased goods costing $140,000 from Mitsubishi in Japan. Payment for the goods is due August 1. The exchange rates for $1 U.S. are as follows:

	Exchange Rates of $1 for Yen
Spot rate, June 1	104
Forward rate, August 1	102
Spot rate, August 1	101

Required:

If Mitsubishi decided to hedge $100,000 and self insure the balance, what gain or loss would the company record on its books for the sale to Dow Chemical?