Problem
Assume you manage a firm that faces transaction exposure. Your company manufactures and sells automobile parts around the world. You have just completed a large sale of parts to an auto manufacturer in France and received a promised payment of €138 per part. You have already sold 18,000 parts and are now awaiting payment which you expect 90 days from today. The exchange rate today is $1.17/€. Over the next ninety days, the direct exchange rate unexpectedly moves from $1.17/€ to $1.25/€. What is the gain in domestic revenue due to this unexpected move in the exchange rate?