Question
On October 25, 2020, a U.S. company sold merchandise on credit to a customer in Spain at an invoice price of 1,000, when the exchange
On October 25, 2020, a U.S. company sold merchandise on credit to a customer in Spain at an invoice price of €1,000, when the exchange rate was $1.25/€. On December 31, 2020, the U.S. company's year-end, the exchange rate was $1.257/€. On February 1, 2021, when the exchange rate was €1.23, the U.S. company received €1,000 in payment for the merchandise.
The U.S. company's exchange gain or loss for 2020 is
| A. | $20 gain |
| B. | $7 loss |
| C. | $20 loss |
| D. | $7 gain |
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Fundamentals of corporate finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
10th edition
978-1260013955, 78034639, 978-0078034633
