Burton Manufacturing. Jason Stedman is the director of finance for Burton Manufacturing, a U.S.-based manufacturer of handheld computer systems for inventory management. Burton's system combines a low-cost active tag that is attached to inventory items (the tag emits an extremely low-grade radio frequency) with custom designed hardware and software that tracks the low-grade emissions for inventory control. Burton has completed the sale of an inventory management system to a British firm, Pegg Metropolitan (UK), for a total payment of 1,800,000. The exchange rates shown in the popup window, 10, were available to Burton on the dates shown, corresponding to the events of this specific export sale. Assume each month is 30 days. a. What will be the amount of foreign exchange gain (loss) upon settlement? b. If Jason hedges the exposure with a forward contract, what will be the net foreign exchange gain (loss) on settlement? a. What will be the amount of foreign exchange gain (loss) upon settlement? Enter a positive number for a gain or a negative number for a loss. $ (Round to the nearest dollar.) b. If Jason hedges the exposure with a forward contract purchased on the date the product is shipped, what will be the net foreign exchange gain (loss) on settlement? Enter a positive number for a gain or a negative number for a loss. $ (Round to the nearest dollar.) If Jason hedges the exposure with a forward contract purchased on the date the contract is signed, what will be the net foreign exchange gain (loss) on settlement? Enter a positive number for a gain or a negative number for a loss. $ (Round to the nearest dollar.) 10: Data Table Date February 1 March 1 Spot Rate ($/) 1.7939 Forward Rate ($/) 1.7867 Days Forward 210 1.7257 180 Event Price quotation for Pegg Contract signed for sale Contract amount, pounds Product shipped to Pegg Product received by Pegg Pegg makes payment 1.7342 1,800,000 1.7585 June 1 August 1 September 1 1.7668 1.7885 1.7124 90 30 1.7853 Burton Manufacturing. Jason Stedman is the director of finance for Burton Manufacturing, a U.S.-based manufacturer of handheld computer systems for inventory management. Burton's system combines a low-cost active tag that is attached to inventory items (the tag emits an extremely low-grade radio frequency) with custom designed hardware and software that tracks the low-grade emissions for inventory control. Burton has completed the sale of an inventory management system to a British firm, Pegg Metropolitan (UK), for a total payment of 1,800,000. The exchange rates shown in the popup window, 10, were available to Burton on the dates shown, corresponding to the events of this specific export sale. Assume each month is 30 days. a. What will be the amount of foreign exchange gain (loss) upon settlement? b. If Jason hedges the exposure with a forward contract, what will be the net foreign exchange gain (loss) on settlement? a. What will be the amount of foreign exchange gain (loss) upon settlement? Enter a positive number for a gain or a negative number for a loss. $ (Round to the nearest dollar.) b. If Jason hedges the exposure with a forward contract purchased on the date the product is shipped, what will be the net foreign exchange gain (loss) on settlement? Enter a positive number for a gain or a negative number for a loss. $ (Round to the nearest dollar.) If Jason hedges the exposure with a forward contract purchased on the date the contract is signed, what will be the net foreign exchange gain (loss) on settlement? Enter a positive number for a gain or a negative number for a loss. $ (Round to the nearest dollar.) 10: Data Table Date February 1 March 1 Spot Rate ($/) 1.7939 Forward Rate ($/) 1.7867 Days Forward 210 1.7257 180 Event Price quotation for Pegg Contract signed for sale Contract amount, pounds Product shipped to Pegg Product received by Pegg Pegg makes payment 1.7342 1,800,000 1.7585 June 1 August 1 September 1 1.7668 1.7885 1.7124 90 30 1.7853
