Monument Company (a U.S.-based company) ordered a machine costing 300,000 from a foreign supplier on January 15, when the spot rate was $1.34 per . A one-month forward contract was signed on that date to purchase 300,000 at a forward rate of $1.36. The forward contract is properly designated as a fair value hedge of the 300,000 firm commitment. On February 15, when the company receives the machine, the spot rate is $1.35. At what amount should Monument Company capitalize the machine on its books?

Multiple Choice

• $405,000

• $104,000

• $408,000

• $402,000