Question
Merit & Family purchased engines from Canada for 26,000 Canadian dollars on March 10 with payment due on June 8. Also, on March 10, Merit
Merit & Family purchased engines from Canada for 26,000 Canadian dollars on March 10 with payment due on June 8. Also, on March 10, Merit acquired a 90-day forward contract to purchase 26,000 Canadian dollars at C$1 = $0.50. The forward contract was acquired to manage Merit & Familys exposed net liability position in Canadian dollars, but it was not designated as a hedge. The spot rates were |
March 10 | C$1 | = | $ | 0.49 | ||||
June 8 | C$1 | = | $ | 0.52 | ||||
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