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USNet, Inc., an American networking equipment firm, sells CAD12.5 million worth of networking gear to a Canadian telecom company. The term of the transaction calls
USNet, Inc., an American networking equipment firm, sells CAD12.5 million worth of networking gear to a Canadian telecom company. The term of the transaction calls for a payment of CAD 12.5 million to be paid immediately. Canadian interest rate is 5% per year, and the US interest rate is 2%. How much is USNets transaction exposure?
A. | CAD 12.75 million |
B. | CAD 13.125 million |
C. | CAD 12.5 million |
D. | CAD 0 |
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