Question - Assume that Lewis International sells running shoes to a British importer on June 1 and the sale is denominated at £75,000 and will be collected on July 15th. At the same time, Lewis International entered into a forward contract to hedge the receivable. Assume the following exchange rates:
Spot rate on June 1 $1.6200
Forward rate for July 15 delivery $1.6000
Spot rate on June 30 $1.6100
Spot rate on July 15 $1.5950
What is the amount of cash that Lewis will receive for the sale?
a. $120,750
b. $120,000
c. $119,625
d. $121,500