Bobcat Company, a U$.$S$.-$based manufacturer of industrial equipment, just purchased a Korean company that produces plastic nuts and bolts for heavy equipment. The purchase price was W$7,500$ million. W$1,000$ million has already been paid, and the remaining W$6,500$ million is due in six months. The spot rate is W$1,110/$$$,$ and the $6-$month forward rate is $W1,\frac{175}{\text{\$}}.$ The $6-$month Korean won interest rate is $16\%$ per annum, the $6-$month U$.$S$.$ dollar rate is $4\%$ per annum. Bobcat can invest at these interest rates or borrow at $2\%$ per annum above those rates. Bobcat's weighted average cost of capital is $10\%.$

a$.$ What steps should Bobcat take if it wishes to engage in a money market hedge?

b$.$ What would be the total repaymen't at the end of $6$ months if Bobcat finances the hedge with a U$.$S$.$ dollar loan?

c$.$ What would be the total repayment at the end of $6$ months if Bobcat finances the hedge with the company's operating resources?

d$.$ What would be the total payment at the end of $6$ months if Bobcat chooses to hedge its foreign currency transaction exposure using a forward hedge?

e$.$ Should Bobcat select a money market hedge financed with a U$.$S$.$ dollar loan, money market hedge financed by the company's operating resources, or a forward hedge? Justify your response.

f$.$ What would be the foreign exchange transaction gain or loss if Bobcat uses a money market hedge?

g$.$ What would be the foreign exchange transaction gain or loss if Bobcat uses a forward hedge?

h$.$ At what cost of financing would Bobcat be indifferent between the money market hedge and the forward hedge? i$.$e$.,$ benchmark rate.