Palmer Ltd is a British importer of computer chips. The company has contracted to purchase 4,000 units of chips at a unit price of 20 Swiss Franc from one Swiss company. Three month's credit is allowed to Palmer Ltd before payment is due. Palmer Ltd currently has no surplus cash, but can borrow short term at 2% above bank base rate or invest short term at base rate in either the United Kingdom or Switzeriand. Exchange Rates Spot 1 month forward 3 moriths Swiss franc/E 2.96-2.98 2.945-2.975 2.925-2.955 Current Bank Base Rates 6% per annum 10% per annum Switzerland United Kingdom Explain why Palmer Ltd needs to hedge its account payable.