Blackwater is an Irish firm which recently bid on a contract to supply goods to a British company. Blackwater will find out on ${31}^{st}$ March whether or not it has been awarded the contract. If Blackwater is awarded the contract then it will receive payment in British pounds of $657,111$ on ${31}^{st}$ July. When Blackwater submitted its bid, it purchased a $657,111$ put option from its bank. This option has an exercise date of ${31}^{st}$ July and a striking price of $0\mathrm{.}87=1.$

Required:

Prepare a memo for Blackwater Ltd$.,$ advising what steps it should take on ${31}^{st}$ July in each of the following situations. Supported your answers with detailed calculations.

$\backslash$table$[[,$Contract awarded to Blackwater on $31$st March?${?}^{st},\backslash$table$[[$Spot rate on$],[{31}^{st}$ July$]]],[$Situation $1$:$,$Yes,$0\mathrm{.}83=1$