Brisco Bricks Purchases Raw Material from Its Foreign Supplier, Bolivian

Brisco Bricks purchases raw material from its foreign supplier, Bolivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Brisco's fiscal year-end. The pertinent exchange rates were as follows: $$\begin{array} { | l | l | l | } \hline \text { May 8 } & \text { Spot rate: } & \$ 1.25 \\\hline \text { May 31 } & \text { Spot rate: } & \$ 1.26 \\\hline \text { Jun. 7 } & \text { Spot rate: } & \$ 1.20 \\\hline\end{array}$$ How much U.S. $ will it cost Brisco to finally pay the payable on June 7?

A) $1,666,667.
B) $2,440,000.
C) $2,520,000.
D) $2,500,000.
E) $2,400,000.

Correct Answer:

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