princess cruise company (3)

Princess Cruise Company (PCC) purchased a ship from Mitsubishi Heavy Industry for 520 million yen payable in one year. The current spot rate is $125/$ and the one year forward rate is 111/$. The annual interest rate is 6 percent in Japan and 9 percent in the United States PCC can also buy a one year call option on yen at the strike price of $ 0080 per yen for a premium of 014 cents per yen a. Compute the future dollar costs of meeting this obligation using the money market and forward hedges. Money Market Forward Hedge