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What would be profits or loss from sales

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Question - Jetta production cost in 2002 and 2003 was 12,000 Euro per Jetta. Jettas were sold in US at $13,000 in 2002 and 2003. Forward hedge exchange rate was 1 $/Euro in 2003. The market exchange rate was 1.15 $/Euro (i.e. rate without hedge) in 2003. If 8,000 Jetta were sold in US, in 2003, by 60% forward hedge and 40% not hedged. What would be profits or loss from sales of 8,000 Jetta in US?

a. Profit of 2.57 million Euro

b. Loss of .83 million Euro

c. Profit of 4.72 million Euro

d. Loss of 1.63 million Euro

e. Profit of 1.42 million Euro

Reference no: EM132485297

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