Carla Vista Industries has purchased equipment from a Brazilian firm for a total cost of 295,000 Brazilian reals. The firm has to pay in 30 days. Citibank has given the firm a 30-day forward quote of $0.3102/real. Assume that on the day the payment is due, the spot rate is $0.3418/real. How much would Carla Vista save by hedging with a forward contract?
