Question 3 Financial Instruments Nimbat Umbaticus Corp (NUC) imports and sells a product called The Slab", which is a small computer (around the size of a large disk drive) without screens or input devices. The Slabs are manufactured in a sustainable production facility in Bhutan, just outside Thimpu. NUC's financial year ends on 30th June. On 1st July 2019, NUC ordered a consignment of Slabs" with an order value of 1,000,000 ngultrum (the Bhutanese currency, symbol BTN). Title to the shipment passes on delivery. This order was planned a few months earlier and so on 15 April 2019, NUC contracted with its bank (the Cerious Bank of Armidale, CBA) to enter a forward contract, which would pay 1,000,000 BTN on 31" July in exchange for $200,000.00. NUC paid CBA $6,000 on signing this contract. The Slabs" were delivered on 7 July 2019, with payment required on 315 July 2019. NUC made payment for the shipment on 315 July and settled the forward contract. Both transactions were undertaken through CBA, so you may net off the 315 July entries if you wish. Assume that the forward contract meets the criteria to provide a qualifying hedge for the inventory purchase. In calculating the value of the forward contract, you may ignore the time value of money. The following are relevant spot and forward exchange rates during this time: date spot rate forward rate for 31st July 1st April 2019 1.00BTN = 0.2025 AUD 1.00BTN = 0.2060 AUD 30t April 2019 1.00BTN = 0.2025 AUD 1.00BTN = 0.2061 AUD 31" May 2019 1.00BTN = 0.2069 AUD 1.00BTN = 0.2073 AUD 30"h June 2019 1.00BTN = 0.2060 AUD 1.00BTN = 0.2065 AUD 1st July 2019 1.00BTN = 0.2060 AUD 1.00BTN = 0.2065 AUD 7th July 2019 1.00BTN = 0.2090 AUD 1.00BTN = 0.2080 AUD 315 July 2019 1.00BTN = 0.2111 AUD