On 11/1/X7 Cherr takes delivery of merchandise costing 1,000.Payment will be made on 2/28/X8. Cherr enters a forward purchase contract to buy 1,000 on February 28, 20X8.

Spot rates: 11/1/X7 $1.50/ ; 12/31/X7 $1.53/ ; 2/28/X8 $1.55/.

Forward rates for Feb 28 delivery: 11/1/X7 $1.52/ ; 12/31/X7 $1.54/ ; 2/28/18 $1.55/.

What was the net amount paid for this inventory by Cherr?

Select one:

a.$1,530

b.$1,500

c.$1,520

d.$1,550

e.$1,540