Suppose that today you purchased a shipment of lumber from Canada that you will resell in your Walla Walla hardware store for $26,000 U.S. The cost of the lumber is fixed at $21,000 Canadian, which will be paid in Canadian dollars (CDN) to the supplier when the shipment arrives in 30 days. The spot rate today is $1.50 CDN = 1 USD (right-column exchange rate). What would be your gross profit or loss on the sale of this lumber assuming: (1) the value of the CDN dollar (relative to the USD) did not change during the next 30 days; or (2) the exchange rate in 30 days was $1.65 CDN = 1 USD?

a. (1) $5,000 U.S. profit; (2) $2,900 U.S. profit.

b. (1) $12,000 U.S. profit; (2) $10,444 U.S. profit.

c. (1) $5,500 U.S. loss; (2) $2,350 U.S. loss.

d. (1) $12,000 U.S. profit; (2) $13,273 U.S. profit.

e. None of the above.