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Part II. (35 points) Aming Corporation, a U.S. enterprise, sold product to a customer in Wilson 100.000 with payment required on April 1. 20x2. Relevant

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Part II. (35 points) Aming Corporation, a U.S. enterprise, sold product to a customer in Wilson 100.000 with payment required on April 1. 20x2. Relevant exchange rates Forward rate (to 4/1/x2) $1.87 $1.85 $1.84 Spot rate October 1, 20x1 December 31, 20x1 April 1, 20x2 1.86 1.90 Amazing Corporation enters a forward contract on October 1, 20xl to sell 100,000 six months bent, The discount factor corresponding to the company's incremental borrowing rate for 3 months 694 Required: April 1, 20x2. " How much is the fair value of the forward contract on December 31, 20x1. b. Assume that Amazing Corporation designated the forward contract as a fair value hedge. what would be the impact on net oncome in 20x1 and 20x2? c. Assume that Amazing Corporation designated the forward contract as a cash Now hedge, what would be the impact on net oncome in 20x1 and 20x2? (The straight-line method is used to amortize the discount on the forward contract). Part II. (35 points) Aming Corporation, a U.S. enterprise, sold product to a customer in Wilson 100.000 with payment required on April 1. 20x2. Relevant exchange rates Forward rate (to 4/1/x2) $1.87 $1.85 $1.84 Spot rate October 1, 20x1 December 31, 20x1 April 1, 20x2 1.86 1.90 Amazing Corporation enters a forward contract on October 1, 20xl to sell 100,000 six months bent, The discount factor corresponding to the company's incremental borrowing rate for 3 months 694 Required: April 1, 20x2. " How much is the fair value of the forward contract on December 31, 20x1. b. Assume that Amazing Corporation designated the forward contract as a fair value hedge. what would be the impact on net oncome in 20x1 and 20x2? c. Assume that Amazing Corporation designated the forward contract as a cash Now hedge, what would be the impact on net oncome in 20x1 and 20x2? (The straight-line method is used to amortize the discount on the forward contract)

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