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Assuming no forward contract was entered into how much foreign exchange gain or loss should Reiter report on its year 1 income statement with regard to this transaction

Assuming no forward contract was entered into, how much foreign exchange gain or loss should Reiter report on its year 1 income statement with regard to this transaction? a. A$5,000 gain. b. A $5,000 gain. c. A$2,000 loss. d. A $1,000 loss. Reiter Corp. (a U,S - based company) sold parts to an Israeli customer on December 1, year 1, with payment of 100, 000 Israeli shekels to be received on March 31, Year 2. The following exchange rates apply: Reiter s incremental borrowing rate is 12 percent. The present value factor for three months at an annual interest rate of 12 percent { 1 percent per month } is 0.9706.

Apr 02 2020 View more View Less

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