On June 18,Burger Corporation Entered into a Firm Commitment to Purchase

question 74

Multiple Choice

On June 18,Burger Corporation entered into a firm commitment to purchase specialized equipment from the Hyabuza Trading Company for ¥80,000,000 on August 20.The exchange rate on June 18 is ¥100 = $1.To reduce the exchange rate risk that could increase the cost of the equipment in U.S.dollars,Burger pays $12,000 for a call option contract.This contract gives Burger the option to purchase ¥80,000,000 at an exchange rate of ¥100 = $1 on August 20.On August 20,the exchange rate is ¥93 = $1.How much did Burger save by purchasing the call option (answers rounded to the nearest dollar) ?

• A) $12,000
• B) $48,215
• C) $60,215
• D) Burger would have been better off not to have purchased the call option.

---

Definitions:

Conflict Theory

is a sociological perspective that views social life as a competition and focuses on the distribution of resources, power, and inequality.

Congress Representation

The process by which citizens are represented in Congress, the legislative body of the United States, typically through elected officials.

African Americans

A racial or ethnic group in the United States identified by their ancestry from native African populations, with a unique history, culture, and social experiences.

White Women

Refers to females of European descent or who identify with the white racial category in societal contexts.