P 12-1 The economics of derivatives Wang Corporation enters into a forward agreement with Sung Corporation on April 1, 2016, to buy 250,000 gallons of fuel oil at $3.52 on December 31, 2016. At the time of inception of the forward, the price for fuel oil is $3.55. On December 31, 2016, the price of fuel oil is $3.58. The contract allows for net settlement.

REQuIRED:

1. What is the net settlement on the forward contract?