I need help with this hedge excel project, please help.

Capital Industrial Inc. (CII) of Richmond Virginia is about to close a sale with RRC Inc, of Toronto Canada for production materials, etc., and the sale is invoiced in the buyers currency. The Chief Financial Officer of CII has enlisted the director of risk management, Sarah Oshi, to choose an instrument to hedge the C$15,000,000 accounts receivable which is due in 6 months. As the risk management group of CII, Ms Oshi has chosen you to analyze different hedging methods. The CFO has made it clear that $10,250,000 is the minimum revenue which would be acceptable for this sale. Of course, in order to make the best decision possible, you will need a forecast of the projected spot rate in 6 months. Because forecasts can be widely divergent, the director expects you to examine the 4 possibilities below to help obtain a forecast. She feels a weighted average forecast would be appropriate and that the techniques considered more reliable should be assigned the higher weights. They are: 1) Use relative PPP 2) Use an economic regression model to make an informed projection. Your associate, Amy Fowler, has run a regression model and obtained the necessary coefficients and thus it would only require a few inputs to forecast the rate. The model is as follows: CDt = .25% + 0.95(INF t-1) 0.40(GDPGt-1) 0.65(INTt-1) where: CD = semi-annual percent change in the C$ relative to the US$, INF = the most recent semi-annual inflation differential (US rate Canadian rate), GDPG = the most recent semi-annual gross domestic product growth differential (US Canadian), INT = the most recent semi-annual real interest rate differential using 6 month treasuries as the nominal rate. (Use the loan interest rates on the back of this page as the nominal rates). (Thus, the 0.50 coefficient means for a 1% inflation differential, the C$ is expected to appreciate by 0.50%). Finding the current values of these differentials will allow you to determine an expected change in the value of the C$, and then calculate a projected spot rate using the formulas for measuring a change in the spot rate. 3) Forward market efficiency. 4) Find a forecast from a respectable source

After making some calls to international banks, you obtain the following quotes: Bid Ask Spot rate $0.7292/C$ $0.7295/C$ Three-month forward $0.7304/C$ $0.7311/C$ Six-month forward $0.7370/C$ $0.7381/C$ U.S. 6 month investment rate 4.20% p.a. U.S. 6 month loan rate prime rate + 2.00% risk premium p.a. Canada 6 month investment rate 3.50% p.a. Canada 6 month loan rate 8.50% p.a. 6 month put option w/strike=$0.7000 premium 1.25% of spot mid-rate 6 month call option w/strike=$0.7400 premium 1.25% of spot mid-rate The weighted average cost of capital for CII is estimated to be 13% p.a. The CFO has informed your department that the dollar funds from a money market hedge would be used in place of a U.S. dollar loan, and the money to pay for any option premiums would be paid for using cash on hand at the WACC rate. The director of risk management expects you to consider the following alternatives: 1. unhedged, 2. forward market hedge, 3. money market hedge, 4. purchasing a put option and 5. range forward. You are expected to provide the director with a typed proposal which includes: a. (20 points) PART I: A discussion of the foreign exchange forecast and a sheet which shows your calculations of the individual methods and the weighted average calculation. b. (45 points) PART II: Calculations and explanations of each hedging alternative. Also, what is the breakeven exchange rate between the option and the higher valued hedge (FMH or MMH)? c. (20 points) PART III: One computer generated graph and spreadsheet of all 5 hedging alternatives. Make sure the graph covers important spot rates such as minimum acceptable revenue, forecasted rate, and all bends in the options. (i.e, at least from 0.6800 to 0.7800 with increments of .005. Also, make the graph its own whole page please). d. (10 points) PART IV: Your final decision and the reasons for it. e. (5 points) The proposal should be of the quality that you would use as a business presentation, and PART V: you must turn in copies of all documents from the sources you use as references to rates, forecasts etc. and quote where they came from in your explanations in Part I).