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with poyment to be made in foreign curtency (FC) on March 1, Year 2. At the dite of salis, Sliva Company entered into a four-month

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with poyment to be made in foreign curtency (FC) on March 1, Year 2. At the dite of salis, Sliva Company entered into a four-month forward contract to self FCU 380,000 Ralravit rachange rutes foe the FC are: 380,000 surw companys incremental borrowing rate is 12 percent. The present value foctor for two months At an annuel interest rate of 12 (1S per month) ts 0.98. Bequired: 1. Complete the schedule provided below, You should use vour answer windaw ta nendire and minalata tha whathele 2. The fonward contiact is properly desiznoted av a caibfouchiedie of foreicn currency payableffectivable (dejending on whit you havel. Answer the queitions below. Support your answer by computations. 2.1. How the forward contract will be reponted on December 31 Year I Bolance sheots ai an a ant or as a lability h troplain. 2.2. What is the tair value of the forward contract on December 31, Yeer 1 ? Show connoutation: 2.3. What b the fair vahue of the forward contract on March 1 , Vear 27 shiow compuation. 2.4. How the diference between spot and forward rates on November 1 , Yeur 1 thould be eccounted for fas a premium/dlkount, and al erpense/revenue) and what is the tutal anount? Proside computations and the lonvard contract. Sheadd the tompsny puerche the ogtion on 1/01/2z z toplain. with poyment to be made in foreign curtency (FC) on March 1, Year 2. At the dite of salis, Sliva Company entered into a four-month forward contract to self FCU 380,000 Ralravit rachange rutes foe the FC are: 380,000 surw companys incremental borrowing rate is 12 percent. The present value foctor for two months At an annuel interest rate of 12 (1S per month) ts 0.98. Bequired: 1. Complete the schedule provided below, You should use vour answer windaw ta nendire and minalata tha whathele 2. The fonward contiact is properly desiznoted av a caibfouchiedie of foreicn currency payableffectivable (dejending on whit you havel. Answer the queitions below. Support your answer by computations. 2.1. How the forward contract will be reponted on December 31 Year I Bolance sheots ai an a ant or as a lability h troplain. 2.2. What is the tair value of the forward contract on December 31, Yeer 1 ? Show connoutation: 2.3. What b the fair vahue of the forward contract on March 1 , Vear 27 shiow compuation. 2.4. How the diference between spot and forward rates on November 1 , Yeur 1 thould be eccounted for fas a premium/dlkount, and al erpense/revenue) and what is the tutal anount? Proside computations and the lonvard contract. Sheadd the tompsny puerche the ogtion on 1/01/2z z toplain

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