A British firm has contracted to buy camera parts from a Japanese
manufacturer.  The invoice for 33 million yen is payabale in 3 months.
 The spot exchange rate is 1GBP=171.42 yen; the three-month forward
rate is 1GBP=170.17 yen.  The U.K. interest rate 6.0% p.a.; the
interest rate in Japan is 4.0% p.a. Disregarding transaction costs,
how can the British undertake an effective hedge in the forward
market? How much is the interest or other cost?

From what I understand from my (exam in 3 days) corporate finance
course, the British firm would enter into a forward/futures contract
to buy 33 million yen at the forward rate you mentioned.

They would agree to buy 33mm yen at 1GBP=170.17yen in three months
time. This would lock in a price of 193924 pounds (33mm/170.17) for
those 33 million yen (at the forward rate). No risk of currency
fluctuations.

The other way of doing it (replicating the forward contract with a UK
loan and a Japanese investment): Today - Borrow pounds, use that to
buy yen, invest in Japanese 90 day bank bills. In 90 days - your
investment in Japanese 90 day bills matures, you pay the lens
manufacturer, and settle your UK loan. Cost: You want 33mm yen in 90
days at 4% p.a. You need to invest (33mm/(1+(0.04*90/365))) - 32677699
yen. To buy this today costs (32677699/171.42) - 190629 pounds. At 6%
per annum the loan will cost (190629*(0.06*90/365) = 2820 pounds in
interest. Altogether it would cost you 193450 pounds.

Notice that under the forward contract it would cost 193924 pounds.
The 474 pound difference represents either an arbitrage opportunity
(write the forward contract, enter into the loans and investments at
the todays prevailing rates, get a risk free profit in 90 days) or
transaction costs.

The two options should cost the same in the abscense of transaction costs.

From the rates you give I assume that this is entirely theoretical. If
you're using this to do anything involving actual money you're mad.
See a currency trader.