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use the following information to answer Questions 1, 2, & 3. o Mr. Tea, Inc....

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Accounting

use the following information to answer Questions 1, 2, & 3. o Mr. Tea, Inc. sold equipment to a German firm. Mr. Tea, Inc. agrees to receive 50,000 in 30 days. To reduce the risk resulting from the change in exchange rate, Mr. Tea, Inc. purchased other products from companies in Germany. The company needs to make total 30,000 in 30 days. The current spot rate is $1.4/. 1. What is net transaction exposure? You must show all work to earn credit. No credit will be given without supporting work. (0.5 pts) 2. If the spot rate after 30 days is $1.2/, how much will result in a foreign exchange loss (gain) for the firm? You must show all work to earn credit. No credit will be given without supporting work. (1 pt) 3. The international bank quotes the forward contract rate as: $1.3/-$1.35/. A. The is expected to depreciate substantially against $ in 30 days (below $1.3/). What is your hedging technique? Do you construct the forward contract to sell or buy ? If so, which price do we u

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