A US Company Issues a Purchase Order for Merchandise to a a Canadian

Multiple Choice

A U.S. company issues a purchase order for merchandise to a Canadian supplier. The agreed upon total price is C$100,000, and the current spot rate is $0.82/C$. The company enters a forward contract when the purchase order is issued, at a rate of $0.815/C$, for delivery when the merchandise is received. If the spot rate falls to $0.80/C$ when the merchandise is received and paid for, at what value will the merchandise be reported on the company's books?

A) $80,000
B) $78,500
C) $82,000
D) $81,500