A Quebec-based company works in the import/export of pharmaceuticals. For several months, it has to respond to interesting orders, which comes to it from a new customer in Africa. It therefore asks its European supplier to ship sufficient quantities of products. As transactions are made in Euros, the company often loses money with each conversion of payments received and each foreign exchange acquisition with its bank. To remedy this, it decided to explore the possibility of exercising currency exposure netting for the year, according to the following data.

Here is an accounts table for 3 of its transactions.

Accounts	May	June	July
Accounts receivable	Eur 115 000	Eur 10 000	Eur 100 000
Accounts payable	Eur 5 000	Eur 500 000	Eur 10 000

Cost of conversion = 1%

1. Calculate costs in case of payment without netting. (5 pts)
2. Calculate costs in case of payment with netting. (5 pts)
3. Evaluate the total balance of all transactions and specify whether it is a positive or negative balance. (1 pts). Conclude (the company exercises or does not exercise its option?) (4 pts)