In December 2005, the spot exchange rate for the British Pound was $1.7188/ and the one-year forward rate was $1.8675/. Suppose that at the same time a US company Luther Industries entered into a contract to purchase goods with a price of 375,000 to be delivered in one year. Simultaneously Luther entered into a one-year forward contract to purchase 375,000. At the time the contract payment was due, the spot exchange rate was $1.7975/.

1. (3 points) What is the amount of the payment in U.S. dollars that Luther Industries paid?
2. (2 points) Did Luther benefit from the forward contract? Explain.