I have to determine the current year-end effect on earnings for four different Foreign currency transactions. I'm not sure how to set up my problem properly. The first transaction involves a purchase ofinventory with payment due in 60 days and the second is a forward contract to buy FC in 60 days. I'm confused as to how to set up this problem. How do I used the spot rate (1.150) and the forward rate (1.138)? Is the value of the inventory purchase 100,000 * the forward rate? And it doesn't specify how much FC is being bought.... do I assume it is 100,000 as well? and is that value at the forward rate too? If so, this is a successful hedge and no effect on earnings, from what I can see, but I don't know if I am understanding it correctly.