Amount of sale: $250,000$ Euros

Payment term: Net $60$ days

The exporter bought export credit insurance at a cost of $0\mathrm{.}45\%$ of the amount of sale, with a $10\%$ deductible.

The spot exchange rate at the time of sale was $1\mathrm{.}20$ dollars per euro

This became a problematic sale, as the customer defaulted on the payment and the exporter had to go back to the insurance company and collect, but only $90\%$ after the $10\%$ deductible. The payment from the insurance company did not take place until $90$ days $($one quarter$)$ after the initial sale. The cost of money $($interest rate$)$ was $6\%$ per annum.

When the exporter collected the Euros from the insurance company after the $90$ days, the exchange rate was $1\mathrm{.}15$ dollars per Euro.

Calculate the four costs incurred $($in dollars$)$ and summarize them. Show your calculations. Assume that all the costs in dollars are based on the most recent exchange rate $(1\mathrm{.}15)$

Insurance premium $=$

Interest expense for $90$ days $=$

Foreign exchange transaction loss $=$

Deductible $=$

TOTAL COSTS $=$