Jarvis Corporation transacts business with a number of foreign vendors and customers. These transactions are denominated in FC, and the company uses a number of hedging strategies to reduce the exposure to exchange rate risk. Several such transactions are as follows: Transaction A: On November 30, the company purchased inventory from a vendor in the amount of 100,000 FC with payment due in 60 days. Also on November 30, the company pur- chased a forward contract to buy FC in 60 days. Changes in the value of the commitment are based on changes in forward rates. Transaction B: On November 1, the company committed to provide services to a foreign cus- tomer in the amount of 100,000 FC. The services will be provided in 30 days. On November 1, the company also purchased a forward contract to sell 100,000 FC in 30 days. Transaction C: On November 1, the company forecasted a purchase of equipment in 30 days. The forecasted cost is 100,000 FC, and the equipment is to be depreciated over ve years using the straight-line method of depreciation. On November 1, the company acquired a forward contract to buy 100,000 FC in 30 days. Transaction D: On November 30, the company purchased an option to sell 100,000 FC in 60 days to hedge a forecasted sale to a customer in 60 days. The option sold for a pre- mium of $1,200 and had a strike price of $1.155. The value of the option on December 31 was $2,000. The time value of all hedging instruments is excluded from the assessment of hedge effec- tiveness. Relevant spot and forward rates are as follows: Spot Rate Forward Rate for 30 Daysfrom November 1 Forward Rate for 60 Daysfrom November 30 ovember 1 .. . . . . ... .. .. .. 1 FC $1.12 1FC $1.132 November 15 . . . . . ... .. .. .. 1 FC $1.13 November 30 . . . . . ... .. .. .. 1 FC $1.15 1 FC $1.146 December 31.. . . . . ... .. .. .. 1 FC $1.14 1 FC $1.138 Assuming that the companys year-end is December 31, for each of the above transactions determine the current-year effect on earnings. All necessary discounting should be determined by using a 6% discount rate. For transactions C and D, the time value of the hedging instru- ment is excluded from hedge effectiveness and is to be separately accounted for