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Spot Rate $1.12 $1.13Forward Rate $1.12 $1.13 On December 15, the Chiquita Company, a company based in Ecuador, sells bananas to a company in Italy

Spot Rate $1.12 $1.13Forward Rate $1.12 $1.13

On December 15, the Chiquita Company, a company based in Ecuador, sells bananas to a company in Italy and expects to receive 1 million euro on March 15. The currency used in Ecuador is the US dollar. On December 15, Chiquita hedges the receivable with a forward contract with a delivery date of March 15. On December 15, the following are quotes for the euro.

12/15Bid Ask

Spot Rate $1.07 $1.08
Forward Rate $1.11 $1.12

The forward rate is for a forward contract with a March 15 delivery date. On March 15, the following are quotes for the euro.

3/15 Bid Ask

The forward rate is for a forward contract with a March 15 delivery date.

What is Chiquitas net cash flow in dollars on December 15? On March 15?

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