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

1,200,000. The exchange rates shown belowwere 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.)

Date	Event	Spot Rate	Forward Rate	Days Forward
		($/pound)	($/pound)
1-Feb	Price quotation for Pegg	1.7809	1.7738	210
1-Mar	Contract signed for sale	1.7429	1.7342	180
	Contract amount, pounds	1,200,000
1-Jun	Product shipped to Pegg	1.7618	1.7545	90
1-Aug	Product received by Pegg	1.7935	1.79	30
1-Sep	Pegg makes payment	1.7267	~	~