Seattle Best Company (a U.S. based firm) negotiates a conditional currency call options with Goldman Sachs Bank USA to hedge its accounts payable of 4 million British pounds due on October 31. Seattle Best Company will only exercise its option on the due date. The terms of the conditional currency call options are as follows:

K (exercise price) = $1.23 per pound, Trigger = $1.21 per pound, premium = $0.06 per pound, expiration date = October 31.

If the spot rate on the due date, i.e., October 31, is $1.25 per pound, what is the amount of U.S. dollar Seattle Best Company expects to pay for its 4 million British pounds?

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