Local Corp imported a heavy machine from the US for US$50,000 on October 10, 2019. A letter of credit was opened with a Makati branch based on the commercial invoice for US$50,000, on which Local Corpl made a 100% deposit cover based on the exchange rate of $1.00 to P27.50. Shipment of the heavy machine was effected on December 30, 2019, at which time the exporter collected the proceeds of the letter of credit when the prevailing exchange rate was $1.00 to P28.00. From the exchange rate fluctuation, Local Corp realized:

Group of answer choices

A. P25,000 gain

B.P25,000 loss

C. P5,000 gain

D. No gain, No loss

Answer rating: 100% (QA)

Step 1 Foreign exchange Foreign exchange is the conversion of one currency into ano... View the full answer