On November 1, 2017, Dos Santos Company forecasts the purchase of raw materials from a Brazilian supplier on February 1, 2018, at a price of 200,000 Brazilian reals. On November 1, 2017, Dos Santos pays $1,500 for a three-month call option on 200,000 reals with a strike price of $0.40 per real. Dos Santos properly designates the option as a cash flow hedge of a forecasted foreign currency transaction. On December 31, 2017, the option has a fair value of $1,100. The following spot exchange rates apply: Date U.S. Dollar per Brazilian real $0.40 November 1, 2017 December 31, 2017 February 1, 2018 0.38 0.41 What is the net impact on Dos Santos Company's 2017 net income as a result of this hedge of a forecasted foreign currency transaction? Choose the correct. a. $-0- b. $400 decrease in net income. c. $1,000 decrease in net income. d. $1,400 decrease in net income