14. On February 1, Caterpillar Inc. sold a construction crane to a New Zealand company for 400,000 New Zealand dollars to be paid on April 1. The exchange rates for $1 U.S. are as follows:

	Exchange Rates of $1 for New Zealand dollars
Spot rate, February 1	1.45
Spot rate, April 1	1.44
Forward rate, April 1	1.47

1. How much would be the gain or loss for Caterpillar if it did not hedge the transaction?
2. How much would be the gain or loss for Caterpillar if it hedged the transaction?
3. If Caterpillar hedged 300,000 New Zealand dollars and self insured the balance what gain or loss would the company record on its books for the entire transaction?

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15. On June 1, Hewlett Packard sold computer equipment to Nokia for 1,000,000 kroner. Payment for the goods is due August 1. The exchange rates for $1 U.S. are as follows:

	Exchange Rates of $1 for Norwegian Kroner
Spot rate, June 1	5.60
Forward rate, August 1	5.70
Spot rate, August 1	6.00

Question

If Hewlett Packard hedges 800,000 kroner and self insures the rest, what gain or loss will the company record on its books for the sale to Nokia?