Apollo Fashions, a Clothing Importer, Signed a Contract to Buy

question 49

Multiple Choice

Apollo Fashions, a clothing importer, signed a contract to buy tweed sports jackets from an English manufacturer for £100 each. At the time the contract was signed a British pound was worth $1.52. Apollo immediately entered contracts to sell 5,000 jackets to retailers at a price of $200 each. When Apollo paid for the jackets the exchange rate was $1.45 to the pound. What was Apollo's exchange rate gain or (loss) on the transaction?

• A)$35,000
• B)($35,000)
• C)$70,000
• D)($70,000)

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