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completing 10.12 Farah Jeans. Farah Jeans of San Antonio, Texas, is a new assembly plant near Guatemala City. A final construction payment of 08.400,000 is due in six months. ("O" is the symbol for Guatemalan quetzals.) Farah uses 20% per annum as its weighted average cost of capital. Today's foreign exchange and interest rate quotations are as follows: Construction payment due in 8,400.000 6 months (A/P, quetzals) Present spot rate (quetzals/S) 70000 6-month forward rate (quetzals/) 7.1000 Guatemalan 6-month interest rate 14.000% (per annum) U.S. dollar 6-month interest 6.000% rate (per annum) Farah's weighted average cost of 20.000% capital (WACC) Farah's treasury manager, concerned about the Guatemalan economy, wonders if Farah should be hedging its foreign exchange risk. The manager's own forecast is as follows: Expected spot rate in 6-months (quetzals/$) Highest expected rate (reflecting a 8.0000 significant devaluation) Expected rate 73000 Lowest expected rate (reflecting a 6.4000 strengthening of the quetzal) What realistic alternatives are available to Farah for making payments? Which method would you select and why