On September 1,2017,Mudd Plating Company Entered into Two Forward Exchange

question 32

Multiple Choice

On September 1,2017,Mudd Plating Company entered into two forward exchange contracts to purchase 250,000 euros each in 90 days.The relevant exchange rates are as follows: The first forward contract was to hedge a purchase of inventory on September 1,payable on December 1.On September 30,what amount of foreign currency transaction loss should Mudd Plating report in income?

• A)$0.
• B)$2,500.
• C)$5,000.
• D)$10,000.

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Definitions:

Consumer Surplus

The distinction between what customers can and are ready to pay for a product or service and the amount they end up paying.

Online Classes

Courses or educational programs delivered over the internet, allowing students to learn remotely.

Consumer Surplus

The discrepancy between what consumers are prepared and capable of paying for a product or service compared to what they end up spending.

Willingness to Pay

The maximum amount a buyer is prepared to spend on a good or service, reflecting the value they derive from it.