On November 1, 2001 Zamfir Company, a U.S. corporation, purchased minerals from a Russian company for 2,000,000 rubles, payable in 3 months. The relevant exchange rates between the U.S. and Russian currencies are given: The company's incremental borrowing rate provides a discount rate of 0.975 for three months.
If Zamfir does not attempt to hedge this transaction, what is the gain or loss that should be shown on the company's December 31, 2001 financial statements?

Question

On November 1, 2001 Zamfir Company, a U.S. corporation, purchased minerals from a Russian company for 2,000,000 rubles, payable in 3 months. The relevant exchange rates between the U.S. and Russian currencies are given:  The company's incremental borrowing rate provides a discount rate of 0.975 for three months.
If Zamfir does not attempt to hedge this transaction, what is the gain or loss that should be shown on the company's December 31, 2001 financial statements?

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The Answer of On November 1, 2001 Zamfir Company, a U.S. corporation, purchased minerals from a Russian company for 2,000,000 rubles, payable in 3 months. The relevant exchange rates between the U.S. and Russian currencies are given:  The company's incremental borrowing rate provides a discount rate of 0.975 for three months.
If Zamfir does not attempt to hedge this transaction, what is the gain or loss that should be shown on the company's December 31, 2001 financial statements?