BL Corporation,

 BL Corporation, located in the United States, has an accounts payable obligation of ¥1750 million payable in six months to a bank in Tokyo. The current spot rate is ¥116/$1.00 and the six month forward rate is ¥109/$1.00. The annual interest rate is 3 percent in Japan and 6 percent in the United States.  What is the present value dollar cost of meeting this obligation using the money market hedge ?

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