Armed with the below information, the Company's treasury analyst was then confused as to what to do.

What is the best alternative for the company?

You are asked to help sort out the best alternatives for this company?

what alternatives to follow and

what the pros and cons of each alternative may be?

Description Values

Total purchase amount: 360,000,000

Advance Payment (15% of total): 20,400,000

Retained Earnings Finance Payment (10% of total purchase is available in RE): 13,600,000

Net Settlement needed (by end 6-month): 102,000,000

Current Spot rate: 1.10

6-month Forward: $1.18

WACC: 8%

Call Option, Strike Price: $1.19

Call Option, Premium: 1.2%

Put Option, Strike Price: $1.20

Put Option, Strike Premium:

6-month USD Interest Rate: 4.6% (jumbo rate for 5 years)

6-month EUR Interest Rate: 2.5%

Borrowing Premium: 4.6% EUR