Question: REFER TO THE PHOTO BELOW FOR THE PROBLEM AND QUESTION On January 1, 2025, Nathan Co paid P6,000 cash to acquire a put foreign exchange

REFER TO THE PHOTO BELOW FOR THE PROBLEM AND QUESTION

On January 1, 2025, Nathan Co paid P6,000 cash to acquire a put foreign exchange option for FC37,500 which expires at the end of the year. The option hedges the 2025 forecasted sales of FC37 500. Nathan's fiscal year ends every October 31. 1/1/25 10/31/25 12/31/25 Spot rate (market price) P1.45 P1.20 P1.30 Strike price (exercise price) 1.40 1.40 1.40 Fair value of put option 6,000 25,250 Determine the intrinsic value at inception of the option contract

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