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Please help and explain the part I got wrong Hedging Exposed Liability Position On March 15, 2023, Hunt Brands, a U.S. company, purchased merchandise from
Please help and explain the part I got wrong
Hedging Exposed Liability Position On March 15, 2023, Hunt Brands, a U.S. company, purchased merchandise from a South African company at a price of R1,000,000, payable in two months in rands. To hedge its exposed liability position, Hunt entered a forward contract for purchase of R1,000,000 on May 15,2023 . On May 15 , Hunt closed the forward contract and used the rands to pay its supplier. The merchandise was sold to a U.S. customer for $110,000 in cash on June 5, 2023. Hunt's accounting year ends December 31. Exchange rates ($/R) are as follows: b. Calculate the cash gain or loss realized by Hunt Brands by hedging compared with not hedging. $Step by Step Solution
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