On August 1, Kidd Trading received an order from a British customer for £1,000,000 to be paid on receipt of the goods, scheduled for November 1. The rates for $1 US are as follows:
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Exchange Rates for $1 British £
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Spot rate, June 1
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1.617
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Forward rate, August 1
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1.615
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Spot rate, August 1
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1.616
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(a) How much does Kidd expect to receive from the British customer in dollars using the spot rate at the time of the order?
(b) How much does Kidd expect to receive from the British customer in dollars using the spot rate at the time of payment?