A US company expects to pay 400,000 Singapore dollars (SGD) to its contractor in 180 days. The current spot price of SGD is $0.60. To manage its foreign exchange risk, the company relies on the money markets. Assume the interest rates over 180 days are 1.6% and 2.0%, respectively, in the US and Singapore money markets.

1. [2 marks] Determine the amount of cash the firm needs to deposit in a SGD-denominated account today to cover its payment SGD400,000 in 180 days (i.e., the present value of the funds).
2. Assume the firm borrows the funds required to deposit today. Describe specifically how the firm should implement its money market hedging and determine the notional amount of funds required when the payment is due in 180 days.