Question 3: (Total 11 marks) Crystal Wave Ltd. (CWL) is a Sydney based company that manufactures electronic ear implants. CWL manufactures its ear implants in Australia and exports them to Europe, which accounts for more than half of its total revenue. On the 1st of September 2016, CWL signs a contract with its European distributor in which CWL agrees to deliver 30,000 ear implants and receive EUR24 million on the 1st of December 2016. The exchange rate at the time of signing the contract is 1 EUR = 1.40 AUD. The gross profit margin based on this exchange rate is 30%. Required: (a) If CWL is concerned about the exchange risk, how can it hedge the risk using a future or forward contract? (3 marks) (b) Suppose the exchange rate changes to 1 EUR = 1.30 AUD when CVL receives the Euro payment. In order to maintain the same profit margin, how much must it sell these ear implants for in Euro? (5 marks) (c) Based on your answer to part (b), briefly explain why export-oriented countries want to devalue their currencies, especially in times of economic difficulty