On June 18, Wyman Company (A U

question 58

Multiple Choice

On June 18, Wyman Company (a U.S. Company) sold merchandise to the Nielsen Company of Denmark for €60,000 (Euros) , with a payment due in 60 days. If the exchange rate was $1.35 per euro on the date of sale and $1.14 per euro on the date of payment, Wyman Company should recognize a foreign exchange gain or loss in the amount of:

• A) $12,600 loss.
• B) $60,000 gain.
• C) $68,400 loss.
• D) $12,600 gain.
• E) $60,000 loss.

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Definitions:

Nonmarket Rationing

Distribution of goods and services based on criteria other than price, such as need or merit.

Expected Rate of Return

The anticipated amount of profit or loss from an investment, considering the potential risks and rewards.

Interest Rate

The percentage at which interest is charged or paid on a loan or investment over a specific period of time.

Normal Profit

The profit level that allows a business to cover its costs, including the opportunity cost of capital, without making an economic profit.