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show work please Nova Company ordered raw material from Cambodia on July 1st and agreed to pay 800 million Cambodian Riel for this order on
show work please
Nova Company ordered raw material from Cambodia on July 1st and agreed to pay 800 million Cambodian Riel for this order on December 1st. It negotiated a 5-month forward contract to obtain 300 million Cambodian Riel on that date at $0.00024 per Cambodian Riel. On September 1st, the Cambodian firm informed Nova Company that it won't be able to fulfill that order. The Cambodian Riel on September 1st is $0.00026 and 3-month forward rate exhibits 5% discount. To offset its existing contract Nova Company will negotiate a forward contract to ___ for the date of December 1st and the profit/loss generated from this transaction is a buy Cambodian Riel; loss of $5,600. buy Cambodian Riel; gain of $5,600. sell Cambodian Riel; loss of $5,600. sell Cambodian Riel; gain of $5,600Step by Step Solution
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