Can you answer A & B?

Krystal Krystal is a US based company that manufactures, sells, and installs water purification equipment On April 11, the company sold a system to the Chy of Nagasaki Japan, for installation in Nagasakl's famous Glover Gardens (where Puccini's Madame Butterfly waited for the return of Li Pinkerton) The sale was priced in yen at 20.000.000, with payment doe in three months. The exchange rate and interest rate data are shown in the popup Window DE Note that the interest rate differential vary slightly from the forward discounts on the yen because of time differences for the quotes. The spet 113 164/5 for example, is a mid paint rangeOn April 11, the spot yon traded in London from 118 751/8 to 117577/5 Krystals Japanese competitors are currently borrowing yen from Japanese banks at a spread of two percentage points above the Japanese money rate. Krystals weighted average cost of capital is 17%, and the company wishes to protect the dollar value of this receivable 3 month options are available from Kyushu Bank call option on 20,000,000 at exercise price of 118.00015 a 18% premium or a put option on 20,000,000, at exercise price of 118.0005 a 36% premium a. What are the costs and benefits of alternative hedge? Which would you recommend, and why? b. What is the break-even Yenvestment rate when comparing forward and money market leathes? a. How much in US dollars wil Krystal receive in 3 months without a hedge of the expected (Round to the nearest cont) Data table Spot exchange rate M110 1605 (closing mid-late) 1-month forward rate 117.7095, a 464% per annum premium 3-month forward $116.805/5, a 4.65% per annum premium 1 year forward 112.2685, a 5.25% per annum premium Click on the icon located on the foght corner of the data table in order to copy its content to readsheet Money Rates United States Japan Differential One month 488753 0.092509 4.795009 Three months 4975056 0.09250% 4.88250% Twelve months 52250% 0 308755 491625% Gick on the icon located on the top notcome of databile in order to copy its contents into a spread Print Done Krystal Krystal is a US based company that manufactures, sells, and installs water purification equipment On April 11, the company sold a system to the Chy of Nagasaki Japan, for installation in Nagasakl's famous Glover Gardens (where Puccini's Madame Butterfly waited for the return of Li Pinkerton) The sale was priced in yen at 20.000.000, with payment doe in three months. The exchange rate and interest rate data are shown in the popup Window DE Note that the interest rate differential vary slightly from the forward discounts on the yen because of time differences for the quotes. The spet 113 164/5 for example, is a mid paint rangeOn April 11, the spot yon traded in London from 118 751/8 to 117577/5 Krystals Japanese competitors are currently borrowing yen from Japanese banks at a spread of two percentage points above the Japanese money rate. Krystals weighted average cost of capital is 17%, and the company wishes to protect the dollar value of this receivable 3 month options are available from Kyushu Bank call option on 20,000,000 at exercise price of 118.00015 a 18% premium or a put option on 20,000,000, at exercise price of 118.0005 a 36% premium a. What are the costs and benefits of alternative hedge? Which would you recommend, and why? b. What is the break-even Yenvestment rate when comparing forward and money market leathes? a. How much in US dollars wil Krystal receive in 3 months without a hedge of the expected (Round to the nearest cont) Data table Spot exchange rate M110 1605 (closing mid-late) 1-month forward rate 117.7095, a 464% per annum premium 3-month forward $116.805/5, a 4.65% per annum premium 1 year forward 112.2685, a 5.25% per annum premium Click on the icon located on the foght corner of the data table in order to copy its content to readsheet Money Rates United States Japan Differential One month 488753 0.092509 4.795009 Three months 4975056 0.09250% 4.88250% Twelve months 52250% 0 308755 491625% Gick on the icon located on the top notcome of databile in order to copy its contents into a spread Print Done