Question: Frank has just signed a contract by which he agrees to deliver equipment worth US$10 milllon to a customer in the United States in 2

Frank has just signed a contract by which he agrees to deliver equipment worth US$10 milllon to a customer in the United States in 2 months. One month after delivery, payment will be made in U.S. dollars. Currently, the U.S. dollar is trading at C $1.40.

What will happen to the Canadian dollar value of the receivable if the U.S. dollar drops in value to C$1.35 in 3 months?

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