On October 15 Year 1, our company has executed a binding purchase order for new equipment to be purchased from a supplier in Denmark for a purchase price of DKK1.8 million. The equipment is deliverable on March 31, Year 2 and payment is due on this date. In order to hedge the commitment to pay DKK1.8 million, we enter into a forward exchange contract on October 15, Year 1 to receive DKK1.8 million on March 31, Year 2 at an exchange rate of $0.14: DKK1. Assume the following exchange rates: Date Spot Rates Forward Rates October 15, Year 1 $0.12:DKK1 $0.14:DKK1 December 31, Year 1 $0.13:DKK1 $0.15:DKK1 March 31, Year 2 $0.17:DKK1 n/a The net gain or loss recognized from changes in exchange rates in Year 2 equals When purchased on March 31, Year 2, the equipment would be recorded at $ 2. on the balance sheet. When purchased on March 31, Year 2, the equipment would be recorded at $ 2. on the balance sheet. In Year 2, prior to delivery, the dollar value of the firm commitment 3. (type "increases" or "decreases") by $ On October 15 Year 1, our company has executed a binding purchase order for new equipment to be purchased from a supplier in Denmark for a purchase price of DKK1.8 million. The equipment is deliverable on March 31, Year 2 and payment is due on this date. In order to hedge the commitment to pay DKK1.8 million, we enter into a forward exchange contract on October 15, Year 1 to receive DKK1.8 million on March 31, Year 2 at an exchange rate of $0.14: DKK1. Assume the following exchange rates: Date Spot Rates Forward Rates October 15, Year 1 $0.12:DKK1 $0.14:DKK1 December 31, Year 1 $0.13:DKK1 $0.15:DKK1 March 31, Year 2 $0.17:DKK1 n/a The net gain or loss recognized from changes in exchange rates in Year 2 equals When purchased on March 31, Year 2, the equipment would be recorded at $ 2. on the balance sheet. When purchased on March 31, Year 2, the equipment would be recorded at $ 2. on the balance sheet. In Year 2, prior to delivery, the dollar value of the firm commitment 3. (type "increases" or "decreases") by $