Problem 14-24 Hedging Heating Oil with Futures (LO4, CFA5) Heating oll futures contracts are traded on the New York Mercantile Exchange (NYM), a division of the CME Group. The standard contract size for heating oll futures is 43,300 gallons per contract You have an inventory of 1.732 million gallons, and you want to construct a full hedge. Suppose the average acquisition price of your 1.880 million gallons of heating oil is $1.88 pel gallon and that today's futures price for delivery during your heating season is $2.18, In the past, market conditions in your distribution area were such that you could sell your heating oll to your customers at a price 30 cents higher than the prevalling futures price. To help finance your inventory purchases, you borrowed money. During the heating season, you have to make an interest payment of $600,000. Calculate the pretax profit for your enterprise in the cases shown in the spreadsheet without a hedge in place and with a hedge in place. (Leave no cells blank - be certain to enter "O" wherever required. A negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.)