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In January 2010 your firm bought from an Italian firm goods payable in Euros worth EU2,000,000. Suppose that at that time the exchange rate of the Euros was 1EU=$1.25. Because this was a sale on credit, you paid this bill in October 2010 when the dollar was worth about 0.724 Euros. How much money in dollars have you lost or gained from this purchase on credit?
ANSWER: LOSS $_____________________; GAIN $_________________________
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