Car Corp (A U Assuming a Forward Contract Was Entered Into, at What Amount

Multiple Choice

Car Corp. (a U.S.-based company) sold parts to a Korean customer on December 16, 2013, with payment of 10 million Korean won to be received on January 15, 2014. The following exchange rates applied: $\begin{array}{lrr}&&\text { Forward }\\&\text { Spot}&\text { Rate }\\\text { Date }&\text { Rate}&\text { to Jan. } 15\\\hline\text { December 16, 2013 } & \$ .00092 & \text { \$. } 00098 \\\text { December 31, 2013 } & .00090 & .00093 \\\text { January 15, 2014 } & .00095 & .00095\end{array}$ Assuming a forward contract was entered into, at what amount should the forward contract be recorded at December 31, 2013? Assume an annual interest rate of 12% and a fair value hedge. The present value for one month at 12% is .9901.

A) $200.
B) $295.
C) $495.
D) $500.
E) $9,300.