GED Corporation, located in the United States, has an accounts payable obligation of ¥800 million payable in one year to a bank in Tokyo. The current spot rate is ¥115/$1.00 and the one-year forward rate is ¥110/$1.00. The annual interest rate is 3 percent in Japan and 6 percent in the United States. GED can also buy a one-year call option on the yen at the strike price of $0.0080 per yen for a premium of 0.010 cents per yen. The future dollar cost of meeting this obligation using the forward hedge is:
O $7,272,727.
O $8,800,000
O $6,450,000.
O $6,653,833.