IBM purchased computer chips from NEC, a Japanese electronics concern, and was billed 250 million payable in three months. Currently, the spot exchange rate is 105/$ and the three-month forward rate is 100/$. The three-month money market interest rate is 8 percent per annum (or 2% for 3 months) in the U.S. and 6 percent per annum (or 1.5% for 3 months) in Japan. The management of IBM is considering using the forward contract or the money market hedge to deal with this yen account payable. a) Calculate the future dollar cost of meeting this Yen obligation if you decide to hedge using the forward contract. b) How much should you borrow and what is the dollar cost today?