Ford purchased electric motors from Nidec (a Japanese company) and was billed ¥200 million payable in three months. Two companies agree to share the currency risks. In the Price Adjustment Clause, the neutral zone is ¥115.38/$ - ¥129.42/$, the base rate is ¥122.4/$ and both parties will share the currency risk beyond a neutral zone.

How much each party has to pay/receive if the exchange rate is ¥111.42/$?

a. Ford pays ¥200 million; Nidec receives $1.634 million.

b. Ford pays $1.634 million; Nidec receives ¥200 million.

c. Ford pays ¥196.55 million; Nidec receives $1.764 million.

d. Ford pays $1.764 million; Nidec received ¥196.55 million.