The Greenbay Motor Company ordered six German-built engines at 15,000 each when the direct exchange rate was

Question:

The Greenbay Motor Company ordered six German-built engines at €15,000 each when the direct exchange rate was $1.2500 per euro and elected not to cover the obligation with a forward contract. When the bill was due three months later, the rate was $1.1500. Greenbay’s marginal tax rate is 40%.

a. How much was the exchange rate gain or loss on the deal?

b. What kind of exchange rate gain or loss was it?

c. What was the tax impact?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...