Bobcat Company. Bobcat Company, 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 Won$7,300$ million. Won$1,000$ million has already been paid, and the remaining Won$6,300$ million is due in six months. The current spot rate is Won$1,119/$$$,$ and the $6-$month forward rate is Won$1,168/$$$.$ The $6-$month Korean won interest rate is $15\mathrm{.}5\%$ 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. A $6-$month call option on won with a Won $1,\frac{200}{\text{\$}}$ strike rate has a $4\mathrm{.}4\%$ premium, while the $6-$month put option at the same strike rate has a $3\mathrm{.}7\%$ premium.

Bobcat can invest at the rates given above, or borrow at $2\%$ per annum above those rates. Bobcat's weighted average cost of capital is $10\%.$ Compare alternate ways below that Bobcat might deal with its foreign exchange exposure.

a$.$ How much in U$.$S$.$ dollars will Bobcat pay in $6$ months without a hedge if the expected spot rate in $6$ months is assumed to be Won $1,\frac{119}{\text{\$}}?$ Won $1,\frac{168}{\text{\$}}?$

b$.$ How much in U$.$S$.$ dollars will Bobcat pay in $6$ months with a forward market hedge?

c$.$ How much in U$.$S$.$ dollars will Bobcat pay in $6$ months with a money market hedge?

d$.$ How much in U$.$S$.$ dollars will Bobcat pay in $6$ months with an option hedge if the expected spot rate in $6$ months is assumed to be less than Won $1,\frac{200}{\text{\$}}?$ To be Won $1,\frac{300}{\text{\$}}?$

e$.$ What do you recommend?

a$.$ How much in U$.$S$.$ dollars will Bobcat pay in $6$ months without a hedge if the expected spot rate in $6$ months is assumed to be Won $1,\frac{119}{\text{\$}}?$

$($Round to the nearest cent.$)$