Campagnolo alienates it’s US customer base by changing the front shifter in such a way that it no longer has micro trim. At the same time, their US based customer service manages to piss of smarmy busybody frame builder Richard Sachs who “MAKES THE LEAP” and manages to pull his toadies along with him. Campagnolos market share in the US becomes nearly irrelevant and campyonly.com falls into internet darkness.

Question 1: Is Campy sill relevant?
Question 2: How long will it take Sachs to find this and comment? I’m taking bets. I say 7 hours.

Even though the exchange rate rose to $1.22/€ in December 2003, making the euro more expensive, Manzini would obtain the 500,000 euros using the forward contract at the forward exchange rate of $0.987/€. So, Manzini has to pay 500,000 euros X $0.987/euro = $493,500 in December 2003.

Manzini would pay this amount to the bank in exchange for 500,000 euros, which are then paid to Campagnolo.
This forward contract would have been a good deal for Manzini because without the hedge, it would have had to exchange dollars for euros at the prevailing rate of $1.22/€, raising its cost to $610,000. However, the exchange rate could have moved the other way. If the exchange rate had fallen to $0.85/€, the forward contract still commits Manzini to pay $0.987/€. In other words, the forward contract locks in the exchange rate and eliminates the risk – whether the movement of the exchange rate is favorable or unfavorable.

With the price set at 500,000 euros, Manzini had to pay ($1.22/euro) X (500,000 euros) = $610,000. This cost is $110,000, or 22% higher than it would have been if the price had be set in dollars.

If the price had been set in dollars, Manzini would have paid $500,000, which would have been worth only $500,000 ÷ ($1.22/euro) = 409,836 euros to Campagnolo, or more than 18% less.

Whether the price was set in dollars or euros, one of the parties would have suffered a substantial loss.