On March 1,20X2,McBride Ltd

Multiple Choice

On March 1,20X2,McBride Ltd.issued a purchase order to Tao Heavy Machines (Singapore) Inc.to acquire a drilling machine for $400,000 SGD.On the same day,McBride entered into a forward contract to receive $400,000 SGD on July 31,20X2.The machine was delivered on June 1,20X2 and payment was made July 31,20X2.McBride has an April 30 year-end.The following information has been provided:

Assume that the transaction qualifies as a fair-value hedge.What is the cost of the hedge?

A) $2,200
B) $4,640
C) $4,960
D) $6,680