(Payables) Suppose Boeing imported a Rolls-Royce jet engine for 2 million payable in one year The U.S. interest rate: 5.00% per annum The U.K. interest rate: 6.50% per annum The spot exchange rate: $1.325/ The forward exchange rate: $1.375/ (1-year maturity) Call option premium = $0.02, Strike price = $1.35. If the future spot price is expected to be $1.425/E and assume that the company borrows money to buy the option. Compute the cost to the company in US Dollars using a. Forward Hedge (1 point) b. Money-Market Hedge (3 points) c. Call option (2 points) d. Determine what Spot prices makes the option hedge better than the Forward contract (2 points) +00 000