Jason Stedman is the director of finance for Burton Manufacturing, a U.S.-based manufacturer of hand-held computer systems for inventory management. Burton's system combines a low-cost active tag that is attached to inventory items (the tag emits a 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 a inventory management system to a British firm, Pegg Metropolitan (UK), for a total payment of £1,000,000. The exchange rates shown were available to Burton on the following dates 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?