Najafi Company.$$Najafi$$ Company, U$.$S$.-$based manufacturer of industrial$$ equipment, just purchased a Korean company that produces plastic nuts and bolts for heavy equipment. The purchase price was $8$ comma $300$million Korean won$($KRW$).$ KRW$1,000$ million has already been$$ paid, and the remaining KRW$7,300$million is due in six months. The current spot rate is KRW$1,102=$USD$1\mathrm{.}00,$and the$6-$month forward rate is KRW$1,177=$USD$1\mathrm{.}00.$The$6-$month Korean won interest rate is $15\%$per$$ annum, the$6-$month U$.$S$.$ dollar rate is $4\%$per annum. Najafi can invest at these interest$$ rates, or borrow at $2\%$per annum above those rates. A$6-$month call option on won with a KRW$1$ comma $200=$USD$1\mathrm{.}00$strike rate has a $4\mathrm{.}4\%$premium$,$ while the$6-$month put option at the same strike rate has a $3\mathrm{.}8\%$premium.$$ Najafi's weighted average cost of capital is $11\%.$Compare alternate ways below that Najafi might deal with its foreign exchange exposure.$$

a$.$ How much in U$.$S$.$ dollars will Najafi pay in $6$ months without a hedge if the expected spot rate in $6$ months is assumed to be KRW$1$ comma $102=$USD$1\mathrm{.}00?$KRW$1,177=$USD$1\mathrm{.}00?$

b$.$ How much in U$.$S$.$ dollars will Najafi pay in $6$ months with a forward market$$ hedge?

c$.$ How much in U$.$S$.$ dollars will Najafi pay in $6$ months with a money market$$ hedge?

d$.$ How much in U$.$S$.$ dollars will Najafi pay in $6$ months with an option hedge if the expected spot rate in $6$ months is assumed to be less than KRW$1$ comma $200$equals$$USD$1\mathrm{.}00?$To be KRW$1$ comma $300$equals$$USD$1\mathrm{.}00?$

e$.$ What do you$$ recommend?