Concord Company, a U$.$S$.$ company, made credit sales to four customers in Asia on September $15,2018,$

and received payment on October $15,2018.$ Information related to these sales is shown below:

Concord Company

Sales Transactions

September $15,2018$

Customer Location Invoice Price Currency

Prima Industries Ltd Mumbai $7,195,000$ Indian rupees $($INR$)$

Samal Island Group Cebu City $5,417,000$ Philippine peso $($PHP$)$

Yokama Properties Inc Osaka $11,210,000$ Japanese yen $($JPY$)$

Kinabalu Trading Ltd Johur Bahru $414,000$ Malaysian ringgit $($MYR$)$

The Concord Company$$s fiscal year ends on September $30.$

Required:

$1.$ Use historical exchange rate information available on the Internet at www$.$x$-$rates.com $,$

Historical Lookup, to find the exchange rates between the U$.$S$.$ dollar and each foreign currency

for September $15,$ September $30,$ and October $15,2018.$ When you get to the Internet site click

on Historical Lookup option as shown by the red arrow below:

$2.$ Determine the foreign exchange gains and losses that Concord Company would have recognized

in net income in the fiscal years ended September $30,2018$ and September $30,2019,$ and the

overall foreign exchange gain or loss for each transaction.

$3.$ Explain how and why some companies use hedges for foreign currency transactions. Determine

for which transaction, if any, it would have been important for Concord Company to hedge its

foreign exchange risk.

$4.$ Concord Company could have acquired a one$-$month put option on September $15,2018,$ to

hedge the foreign exchange risk associated with each of the four export sales. In each case, the

put option would have cost $$100$ with the strike price equal to the September $15,2018,$ spot

rate. Determine for which hedges, if any, Concord Company would have realized a net cash flow

benefit from the foreign currency option.