IIllustration One

Wazalendo Company is a Tanzanian company with exports and imports trade with the United Kingdom [UK] and the United States of America [USA]. The following transactions, in the currency specified, are due within the next six months:

• Purchase of goods from UK, cash payment due in three months 15,500
• Sale of goods purchased from UK to a USA customer, cash receipts due in 6 months US$ 29,000
• Purchase of goods from USA, cash payment due in three months US$ 150,000
• Sale of goods purchased from USA to a UK customer, cash receipts due in 6 months 75,000

The spot and forward exchange rates are as follows:

	TZS/UK	TZS/US$
Spot	2,600-2,700	1,350-1,360
Three months forward	2,750-2,800	1,400-1,450
Six months forward	2,850-2,900	1,550-1,600

Required:

Determine the profit or loss to be made by Wazalendo Company on the import-export business assuming that the company arranges to cover the transactions in the forward market.