If a U.S.company purchases goods from a British supplier for a fixed number of U.S.dollars,an exchange gain or loss would not arise for the U.S.company,even if the exchange rate has changed between the time of purchase and the time of payment.

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If the U.S. company has agreed to pay a fixed number of U.S. dollars for the goods purchased from a British supplier, there will be no exchange gain or loss even if the exchange rate has changed between the time of purchase and payment. This is because the exchange rate risk is borne by the British supplier, who will receive the agreed-upon amount in U.S. dollars regardless of the exchange rate at the time of payment.

If a USCompany Purchases Goods from a British Supplier for a Fixed