Momomo is a construction company in Japan. Momomo is concerned on the depreciation of Japanese Yen in the future. The company expected to pay its supplier EUR 950,000 in Germany in three months. At the same time, Momomo is expected to receive a payment of USD1,500,000 from its customer, three months from now. The cost of capital for Sakura is 7.5%.

The current spot rate is at JPY 109/USD and JPY120/EUR The following information was given by Momomos bank.

	Exercise Price	premium
Call option on Yen	JPY 115/USD	1.25%
Call option on Yen	JPY 126/EUR	0.95%
Put Option on Yen	JPY118/USD	1.23%
Put Option on Yen	JPY127/EUR	1.00%

a. How much is the minimum receipt that Momomo able to get if the company decides to perform option market hedge of its account receivable? State your answer in JPY

b. Calculate the maximum cost that Momomo has to bear if the company decides to hedge its account payable using option. State your answer in JPY.