Account payable in turkish Lira (TL). Your recent import from turkey has resulted in a three-month account payable in the amount of TL14.5million. You would like to examine a few hedging strategies. The following information is available. Your borrowing and investment rates in each country are at the same rates.

Spot rate = TL 1.49/$

Three-month forward rate = TL1.62/$

U.S. interest rate = 3.0 percent per year (or 3.0/4% per 3 months)

Turkish interest rate = 8.4 percent per year (or 8.4/4% per 3 months)

WACC of your company = 12.0 percent per year (or 12.0/4% per 3 months)

Cost of an option on TL at the strike price of Tl 1.54/$ = 2.0 percent

Please answer the following question regarding the above case. All answers are in millions.

If you choose not to do anything, the outcome will be:

A. $8.734940

B. unknown

C. $8.950617

D. $9.731544