1. Pilgrimage Fund Board (TH) manages the pilgrimage of Malaysian Muslims. It provides accommodation, transportation, food, healthcare and consultation services to Malaysian pilgrims throughout their pilgrimage. The pilgrimage takes approximately 40 days before the pandemic started last year but under the new norm it is expected to be shorter. Suppose TH entered into a contract with Umm Alqura Hotel in Makkah to rent the hotel for a month for 2022s pilgrimage season at the cost of SAR3,057,120. The contract was signed yesterday and yesterdays spot rate was MYR1=SAR0.88. The payment however is to be made when the first batch of TH staff arrive in Makkah to prepare for the pilgrimage season. Which of the following is TRUE of the contract?

1. If SAR appreciates, TH's rental cost will be lower
2. If MYR appreciates, TH's rental cost will be higher
3. Based on the spot rate above, the rental cost in MYR is 3,474,000
4. Based on the spot rate above, the rental cost in MYR is 2,690,265.60