Your company is exporting a product to S. Korea. The sale price is 160,000,000 won. It is to be paid in one year. The Current spot rate is 800 won to the dollar. The forward won sells at a discount of 12%; but your staff believes that the won will drop 9% over the next year.

If you buy a forward contract today, what will be your U.S. proceeds when the contract comes due?

NOTE: IN THIS PROBLEM, PLEASE BE SURE TO CONVERT TO U.S. DOLLARS PRIOR TO CALCULATING THE PROBLEM. IN OTHER WORDS -- USE THE US DOLLAR RECIPROCAL FOR THE SPOT AND FORWARD RATES AS WELL AS THE FORECASTED RATE.

Using the above information, if you could borrow from a Seoul Bank at 20% per annum aganist the expected future proceeds, what would you receive in the U.S. dollars, and when.