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AbC pays XYZ for engines in Canadian dollars, converting the USD price into CAD. If...

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Accounting

AbC pays XYZ for engines in Canadian dollars, converting the USD price into CAD. If the spot rate on the invoice date is between CAD 0.70 per USD and CAD 0.85 per USD, the spot rate is used to do the conversion. If the spot rate is outside of that range, the rate is moved half the distance back towards the band of acceptable rates. Today, ABC is buying USD $130,047 worth of snowblower engines, and the exchange rate is currently CAD 0.95 per USD. What is ABC's gain or loss from this risk-sharing agreement? Please give your answer to the nearest CAD.

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