Brent Bush, CFO of a medical device manufacturer, BioTron Medical, Inc., was approached by a Japanese...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Brent Bush, CFO of a medical device manufacturer, BioTron Medical, Inc., was approached by a Japanese customer, Numata, with a proposal to pay cash (in yen) for its typical orders of ¥15,000,000 every other month if it were given a 3.5% discount. Numata's current terms are 30 days with no discounts. Using the following quotes and estimated cost of capital for Numata, Bush will compare the proposal with covering yen payments with forward contracts. Spot rate, ¥/$ 30-day forward rate, \/$ 90-day forward rate, ¥/$ 180-day forward rate, \/$ Numata's WACC BioTron Medical's WACC O Yen119,503 How much (in present value terms) will BioTron receive in US$s if Numata is given NO discount and exchange rate risk is managed using the 30-day forward contract? (Hint: Only consider one payment of Yen15,000,000.) O Yen116,142 $116,142 ¥103.86/$ ¥103.82/$ ¥103.71/$ ¥103.58/$ O $119,503 7.50% 9.00% Brent Bush, CFO of a medical device manufacturer, BioTron Medical, Inc., was approached by a Japanese customer, Numata, with a proposal to pay cash (in yen) for its typical orders of ¥15,000,000 every other month if it were given a 3.5% discount. Numata's current terms are 30 days with no discounts. Using the following quotes and estimated cost of capital for Numata, Bush will compare the proposal with covering yen payments with forward contracts. Spot rate, ¥/$ 30-day forward rate, \/$ 90-day forward rate, ¥/$ 180-day forward rate, \/$ Numata's WACC BioTron Medical's WACC O Yen119,503 How much (in present value terms) will BioTron receive in US$s if Numata is given NO discount and exchange rate risk is managed using the 30-day forward contract? (Hint: Only consider one payment of Yen15,000,000.) O Yen116,142 $116,142 ¥103.86/$ ¥103.82/$ ¥103.71/$ ¥103.58/$ O $119,503 7.50% 9.00%
Expert Answer:
Answer rating: 100% (QA)
The detailed answer for the above question is provided below You are correct The present ... View the full answer
Related Book For
Multinational Business Finance
ISBN: 978-0133879872
14th edition
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
Posted Date:
Students also viewed these finance questions
-
Brent Bush, CFO of a medical device manufacturer, BioTron Medical, Inc., was approached by a Japanese customer, Numata, with a proposal to pay cash (in yen) for its typical orders of 12,500,000 every...
-
Brent Bush, CFO of a medical device distributor, BioTron Medical, Inc., was approached by a Japanese customer, Numata, with a proposal to pay cash (in yen) for its typical orders of 12,500,000 every...
-
What is the maximum height above ground that a projectile of mass 0.790 kg, launched from ground level, can achieve if you are able to give it an initial speed of 80.3 m/s?
-
While James Craig and his former classmate Paul Dolittle both studied accounting at school, they ended up pursuing careers in professional cake decorating. Their company, Good to Eat (GTE),...
-
In Exercises 112, solve each equation. 2x x + 6x + 8 x x + 4 2 x + 2
-
Dr. Walter Sullivan was one of several plastic surgeons in Las Vegas visited by Julie Jones. Jones, an exotic dancer, sought plastic surgery to improve her ability to make money in her profession....
-
Fiber Systems manufactures an optical switch that it uses in its final product. The switch has the following manufacturing costs per unit: Another company has offered to sell Fiber Systems the switch...
-
Warranties normally: Multiple select question. have indefinite lives. guarantee repair or replacement. represent liabilities. cover a specific time period.
-
Mr. Ram Lal is running a departmental store in Delhi and has 25 employees in his store. He is planning to open a new store in Sector 2 - Faridabad. Currently, he has already invested around 25 Lacs...
-
providing some information about the main target of employees turnover in Canadian market and tell who or what is directly or indirectly affected by this problem
-
You friend went back to his engineering books and realized that he forgot to account for the growth rate of the well's production. He adjusted his model, and now he believes that the production of...
-
ABC Company produces a part that is used in the manufacture of one of its products. The annual costs associated with the production of 5,000 units of this part are as follows: Direct materials...
-
Provide a project brief for the client. This project brief must include the following: 1. Overview of the site conditions for the construction project, including any specific allowances that have...
-
Winsory Winery Pty received an order for wine worth R750 000 from a company in Netherlands that stopped importing from the company 5 years ago. During the time that the two companies had good working...
-
Redrover Dealers Inc. (Redrover) sold a new limited-edition hybrid limousine to Styling Limousines Ltd. (Styling Limousines) on May 10, 2021, for $175,000. As part of the sale, Redrover has included...
-
If a process has a six-sigma capability, what is the process capability index? a. 1 b. 2 c. 6 d. 12
-
Cargill is generally considered to be the largest privately held company in the world. Headquartered in Minneapolis, Minnesota, the company has been averaging sales of over $113 billion per year over...
-
Use the following data from the International Monetary Fund to answer questions 3.1 through 3.4. 1. What is Australia's balance on goods? 2. What is Australia's balance on services? 3. What is...
-
The Ecuadorian sucre (S) suffered from hyper-inflationary forces throughout 1999. Its value moved from S5,000/$ to S25,000/$. What was the percentage change in its value?
-
How many structural isomers are there for hydrocarbons that have the molecular formula C 4 H 10 ? (a) none (b) one (c) two (d) three
-
Which contains more hydrogen atomsa five-carbon saturated hydrocarbon molecule or a five-carbon unsaturated hydrocarbon molecule? (a) The unsaturated hydrocarbon has more hydrogen atoms. (b) The...
-
Explain why caprylic acid, CH 3 (CH 2 ) 6 COOH, dissolves in a 5, aqueous solution of sodium hydroxide but caprylaldehyde, CH 3 (CH 2 ) 6 CHO, does not dissolve. (a) With two oxygens, the caprylic...
Study smarter with the SolutionInn App