A company in U.S.is selling product to a Spanish company on May 2, 2020. The currency of choice is euros and the invoice is payable in euros on August 3, 2020 (90-day credit). The amount that the U.S. company could like to collect is $500,000. a. If it used the spot exchange rate on May 2, 2020, which is U.S. $1.11/, how much the firm would bill the customer for(in euros)? Write down the invoice amount in euros. b. Assume the company uses an option hedge and purchases a put option at an agreed-upon exchange rate of U.S. $ 1.22/. If on August 3, 2020 the spot exchange rate happens to be U.S. $ 1.24/ should the U.S. company exercise their put option when they collect the euros from the Spanish firm? How much U.S. dollars would the U.S. firm have on August 3, 2020 from this transaction? c. Assume the cost of the put option is 1.25% of the contract amount you calculated in part a. Given your answer in part b, what is the net profit of this financial transaction in U.S. dollars? (Hint: you need to account for the cost of the put option when you calculate the net profits). A company in U.S.is selling product to a Spanish company on May 2, 2020. The currency of choice is euros and the invoice is payable in euros on August 3, 2020 (90-day credit). The amount that the U.S. company could like to collect is $500,000. a. If it used the spot exchange rate on May 2, 2020, which is U.S. $1.11/, how much the firm would bill the customer for(in euros)? Write down the invoice amount in euros. b. Assume the company uses an option hedge and purchases a put option at an agreed-upon exchange rate of U.S. $ 1.22/. If on August 3, 2020 the spot exchange rate happens to be U.S. $ 1.24/ should the U.S. company exercise their put option when they collect the euros from the Spanish firm? How much U.S. dollars would the U.S. firm have on August 3, 2020 from this transaction? c. Assume the cost of the put option is 1.25% of the contract amount you calculated in part a. Given your answer in part b, what is the net profit of this financial transaction in U.S. dollars? (Hint: you need to account for the cost of the put option when you calculate the net profits)