b. yen loan? 12.2 Acua Leather Goods. DeMagistris Fashion Com- pany, based in New York City, imports leather coats from Acua Leather Goods, a reliable and longtime supplier, based in Buenos Aires, Argentina. Payment is in Argentine pesos. When the peso lost its parity with the U.S. dollar in January 2002, it collapsed in value to Ps4.0/$ by October 2002. The outlook was for a further decline in the peso's value. Since both DeMagistris and Acua wanted to continue their longtime relationship, they agreed on a risk-sharing arrangement. As long as the spot rate on the date of an invoice is between Ps3.5/$ and Ps4.5/$, DeMagis- tris will pay based on the spot rate. If the exchange rate falls outside this range, DeMagistris will sharo the difference equally with Acua Leather Goods The risk-sharing agreement will last for six months at which time the exchange rate limits will be reeval- uated. DeMagistris contracts to import leather coats from Acuna for Ps8,000,000 or $2,000,000 at the cur- rent spot rate of Ps4.0/$ during the next six months. a. If the exchange rate changes immediately to Ps6.00/$, what will be the dollar cost of six months of imports to DeMagistris? b. At Ps6.00/$. what will be the peso export sales of Acua Leather Goods to De Magistris Fash- ion Company? 20