Stretch Ingredients needs to buy 10,000 lbs. of German hops in 6 months (for delivery in September 2021). They just agreed to a fixed price contract in US dollars with Hardstone Brewery for $245,000.00. Currently, 1 pound of imported German hops costs 17.50euro. The current exchange rate is $1.2100 per Euro. Stretch Ingredients doesnt want to purchase the hops now and pay carrying costs for storage or run the risk of the hops getting moldy. The CFO is concerned about getting a good price in the future due to some weather problems in Germany that might threaten the harvest but decides to not hedge the risk with a forward contract. If the Euro appreciates 5% relative to the dollar at the time of the hops purchase in late August 2021, how much profit does Stretch Ingredients earn on the sale to Hardstone?

$43,887.50

$22,662.50

$33,250.00

$70,000.00

$245,000.00