The Following Information Pertains to Questions

question 2

Multiple Choice

The following information pertains to questions
RXN's year-end is on December 31.On November 1,2014 when the U.S.dollar was worth $1.165 CDN,RXN sold merchandise to an American client for $300,000.Full payment of this invoice was expected by January 31,2015.On December 1,the spot rate was $1.1450 CDN and the three-month forward rate was $1.1250 CDN.
In order to minimize its Foreign Exchange risk and exposure,RXN entered into a contract with its bank on December 1,2014 to deliver $300,000 U.S.in three months time.The spot rate at year-end was $1.16 CDN.On March 1,2015,RXN received the $300,000 U.S.from its client and settled its contract with the bank.
Significant dates pertaining to this transaction are as follows:
-What is the amount of the discount recorded on the contract?

• A)$1,500
• B)$1,000
• C)$4,000
• D)$3,000

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Definitions:

Ethical Issue

A situation or decision that involves conflicts between moral imperatives, where choosing one may result in transgressing another.

Inaction

The lack of action or delay in responding to a situation, often resulting in negative outcomes or missed opportunities.

Drug-Addicted

Refers to a state of dependency on substances despite harmful consequences.

Morphine

A powerful opioid analgesic drug used to relieve severe or chronic pain by acting directly on the central nervous system.