In this assignment you will analyze a case related toderivative and foreign currency transactions.ProcedureHere is a link to Xerox Corporations 2007 annual report.Getting warmed up:http://www.xerox.com/annualreport/2007/assets/images/header_ar.gifAs you review the annual report draft answers to the followingquestions:What types of derivative transactions does Xerox engage in (cashflow hedges fair value hedges or speculative hedges)?What types of commodities does Xerox hedge? How do derivativetransactions align with Xeroxs overall business strategy?What was the 2007 income statement effect of each category? Givethe total dollar amount as well as the effect as a percentage ofrevenues and income before tax. Have these transactions materiallyaffected the profitability of Xerox? Explain your answer.Where does Xerox disclose the financial statement impact of thecash flow hedges it enters into? Do you consider these to have amaterial impact on its financial position? Explain.