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36 On May 1, 2021, Mosby Company received an order to sell a machine to a customer in Canada at a price of 2,000,000 Mexican
36 On May 1, 2021, Mosby Company received an order to sell a machine to a customer in Canada at a price of 2,000,000 Mexican pesos. The machine was shipped and payment was received on March 1, 2022. On May 1, 2021. Mosby purchased a put option giving it the right to sell 2,000,000 pesos on March 1.2022 at a price of $190,000. Mosby properly designates the option as a fair value hedge of the peso firm commitment. The option cost $3,000 and had a fair value of $3,200 on December 31, 2021 The following spot exchange rates apply Spot Rate $0.095 29 Date May 1, 2021 December 31, 2021 March 1, 2022 $0.094 $0.089 What was the overall result of having entered into this hedge of exposure to foreign exchange risk? Multiple Choice $2.000 decrease in net income $9,000 increase in net income $2.000 increase in net income, What was the overall result of having entered into this hedge of exposure to foreign exchange risk? Multiple Choice $2.000 decrease in net income. $9,000 Increase in net income. $2,000 increase in net income. $0. C $9,000 decrease in net income
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