_____ on 8/3/06, Buyox Entered into a Noncancellable Purchase Agreement

Multiple Choice

_____ On 8/3/06, Buyox entered into a noncancellable purchase agreement with a British vendor involving a custom-made machine. Buyox took delivery of the machine on 12/1/06 (120 days later) . The purchase price was 100,000 pounds, which Buyox remitted to the vendor on l/30/07 (60 days after delivery) . Direct exchange rates on the respective dates are as follows:
Also on 8/3/06, Buyox entered into a 180-day FX forward to buy 100,000 pounds. What is the FX gain or loss recognized in earnings for 2006 on the FX commitment?

A) $ -0-
B) $4,000 gain.
C) $4,000 loss.
D) $7,000 gain.
E) $7,000 loss.