Use the Following Information to Answer the Question(s)below

question 21

Multiple Choice

Use the following information to answer the question(s) below.
On December 1,2014,Thomas Company,a U.S.corporation,purchases inventory from a vendor in Italy for 400,000 euros.Payment is due in 90 days.To hedge the transaction,Thomas signs a forward contract to buy 400,000 euros in 90 days at $1.3670.Thomas uses a discount rate of 6% (present value factor for 30 days = .9950;60 days = .9901;90 days = .9851) .Assume the forward contract will be settled net and this is a cash flow hedge.Currency exchange rates are shown below:

-What is the fair value of the forward contract at February 29?

• A)$-0-
• B)$1,654.97 asset
• C)$1,654.97 liability
• D)$1,680 asset

---

Definitions:

Mental Symbols

are cognitive representations of reality that allow for complex thought processes, including language, mathematical symbols, and images.

SIDS

Sudden Infant Death Syndrome, the unexplained death, usually during sleep, of a seemingly healthy baby less than a year old.

Tummy Time

A practice where infants are placed on their stomachs while awake to help strengthen their neck and shoulder muscles and promote motor skills.

Locomotion

Is the ability to move from one place to another, which can involve walking, running, swimming, or other forms of physical movements.