1. If an item costs 4 Euros in Germany, assuming purchasing power parity with current exchange rates of $1.3135/€, what is the price of the item in the U.S.?
2. An American firm sells farm equipment to a British company for 250,000 to be paid in 180 days. The current exchange rate is $1.98/?. The exporter hedges its exchange rate risk by selling 250,000 forward 180 days at the prevailing 180-day forward exchange rate of $2.01/?. What is the dollar amount the American firm is expected to receive in 180 days?