Hudson Valley Distributors Wants to Be Sure It Has 10,000

question 59

Multiple Choice

Hudson Valley Distributors wants to be sure it has 10,000 cases of Beaujolais Nouveau to sell next November.In January,they enter into an agreement to buy the wine at a price of 34.62 euros to the case.Payment will be due at the end of November.They expect to sell the wine to restaurants and retailers for $63 per case.Hudson Valley has hedged its foreign exchange risk by entering into a forward contract to purchase euros in November at $1.30/euro.If the spot exchange rate at the end of November is $1.35/euro,Hudson Valley's gross profit will be

• A)$283,800.
• B)$138,415.
• C)$162,630.
• D)$179,940.

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Definitions:

Secondary Xylem

The part of a plant's vascular system that carries water and nutrients from the roots to the leaves and provides structural support, chiefly formed during secondary growth in woody plants.

Vascular Cambium

Of plants, lateral meristem that produces secondary xylem and phloem.

Mesophyll

The internal tissues of a leaf, consisting of layers where photosynthesis primarily occurs.