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Business, 26.08.2019 16:10 jaki9

Torres corporation (a u. s.-based company) expects to order goods from a foreign supplier at a price of 111,000 pounds, with delivery and payment to be made on september 20. on july 20, torres purchased a two-month call option on 111,000 pounds and designated this option as a cash flow hedge of a forecasted foreign currency transaction. the option has a strike price of $1.50 per pound and costs $1,110. the spot rate for pounds is $1.50 on june 20 and $1.55 on september 20. what amount will torres corporation report as an option expense in net income for the quarter ended september 30?

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