TransAgro Sdn Bhd, is a leading supplier of agriculture machines located in Shah Alam, Selangor. The Company purchased the machines from Germany and it is settled in EURO currency. The invoices received for the purchases last year with a total amount of EUR100 million. During the last audit, there was an issue that EURO foreign currency exposure was not hedged, and as such, the cost of machine purchases increased substantially at the point of making payments. The Chief Executive Officer (CEO) requested its Senior Finance Manager to analyze and prepare hedging paper for approval by the Board. With the above, answer the following: i. Explain how the unhedged exposure above faced by TransAgro affects its profit margin. Compare it against hedged exposure scenario that should have been taken by TransAgro. (4 marks) Identify three possible arguments by previous Management of TransAgro that maintaining hedging of exposure is irrelevant. Suggest two hedging strategies should have been considered by TransAgro. (3 marks)