Rocter and Gamble's affiliate in India, P&G India, procures much of its toiletries product line from a Japanese company. Because of the shortage of working capital in India, payment terms by Indian importers are typically 180 days or longer. P&G India wishes to hedge an 9.5 million Japanese yen payable. Although options are not available on the Indian rupee (Rs), forward rates are available against the yen. Additionally, a common practice in India is for companies like P&G India to work with a currency agent who will, in this case, lock in the current spot exchange rate in exchange for a 4.45 % fee. Using the following exchange rate and interest rate data, recommend a hedging strategy. Spot rate:¥120.60/$180-day forward rate¥2.400/RpsExpected spot, 180 days¥2.6000180-day Indian rupee investing rate8.000%180-day Japanese yen investing rate1.500%Currency agent's exchange rate4.850%P&G India's cost of capital12.000%