1. True or False
USA Tech company headquartered in New York City has a research facility in Great Britain. Twenty engineers work at the Facility in Great Britain. USA Tech company makes all sales of products and services in U.S. dollars. Each month managers of USA Tech Company (an American company) buys pounds to pay its engineers in Great Britain. From August of 2015 to the end of October of 2016 the cost of the payroll in dollars declined.
2. True or False
USA Tech company headquartered in New York City has a research facility in Great Britain. Twenty engineers work at the Facility in Great Britain. USA Tech company makes all sales of products and services in U.S. dollars. Each month managers of USA Tech Company (an American company) buys pounds to pay its engineers in Great Britain. At the end of April of 2015 the managers of USA Tech bought British Pounds on the forward market for delivery in October of 2016. The forward contract obliges USA TECH to pay 1.45 US dollars per Pound. This forward contract ended up saving USA Tech from having to pay higher pay-roll costs as the Pound appreciated relative to the dollar between May of 2015 and October of 2016.