Simpson Sign Company Based in Frostbite Falls, Minnesota Has a 6-Month

question 3

Multiple Choice

Simpson Sign Company based in Frostbite Falls, Minnesota has a 6-month C$100,000 contract to complete sign work in Winnipeg, Manitoba, Canada. The current spot rate is $1.02/C$ and the forward rate is $1.01/C$. Under conditions of equilibrium, management would use ________ today when preparing operating budgets.

• A) $102,000
• B) $101,000
• C) $100,000
• D) none of the above

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