**BioTron Medical, Inc.**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 other month if it were given a 4.2% discount. Numata's current terms are 30 days with no discounts. Brent Bush will compare the proposal with covering yen payments with forward contracts using the quotes and estimated cost of capital for BioTron Medical in the popup window. Should Brent Bush accept Numata's proposal? Assume a 360-day financial year.**Calculation Task:**Determine how much in U.S. dollars BioTron Medical will receive with the discount. (Round to the nearest cent.)**Data Table:**- **Spot rate:** ¥111.86/$- **30-day forward rate:** ¥111.46/$- **90-day forward rate:** ¥110.86/$- **180-day forward rate:** ¥110.46/$- **Numata's WACC:** 8.88%- **BioTron's WACC:** 9.45%*Instructions: Click on the icon located on the top-right corner of the data table to copy its contents into a spreadsheet.*

Given, Customer Numata with a proposal to pay cash for its typical orders of ¥12,500,000 every other month if given a 4.2% discount. Current terms = 30 days with no discountAfter allowing the discounts, Bio tron medical receive with discount is = ¥12,500,000 * (1 - 0.042) = ¥11,975,000 The current spot rate is ¥111.86/$ At present US firm will get, ¥11,975,000 / ¥111.86 = $107,053.46 US firm will get $107,053.46

Business

Finance

BioTron Medical, Inc. Brent Bush, CFO of a medical device distributor, BioTron Medical, Ic., was approached by a Japanese customer, Numata, with a proposal to pay cash (in yen) for its typical orders of ¥12,500,000 every other month if it were given a 4.2% discount. Numata's current terms are 30 days with no discounts. Using the quotes and estimated cost of capital for BioTron Medical in the popup window, E, Bush will compare the proposal with covering yen payments with forward contracts. Should Brent Bush accept Numata's proposal? Assume a 360-day financial year. How much in U.S. dollars will BioTron Medical receive with the discount? (Round to the nearest cent.) Data table Spot rate: ¥111.86/S ¥111.46/$ ¥110.86/$ 30-day forward rate: 90-day forward rate: 180-day forward rate: Numata's WACC ¥110.46/$ 8.88% BioTron's WACC 9.45% Click on the icon located on the top-right corner of the data table in order to copy its contents into a spreadsheet.

BioTron Medical, Inc. Brent Bush, CFO of a medical device distributor, BioTron Medical, Ic., was approached by a Japanese customer, Numata, with a proposal to pay cash (in yen) for its typical orders of ¥12,500,000 every other month if it were given a 4.2% discount. Numata's current terms are 30 days with no discounts. Using the quotes and estimated cost of capital for BioTron Medical in the popup window, E, Bush will compare the proposal with covering yen payments with forward contracts. Should Brent Bush accept Numata's proposal? Assume a 360-day financial year. How much in U.S. dollars will BioTron Medical receive with the discount? (Round to the nearest cent.) Data table Spot rate: ¥111.86/S ¥111.46/$ ¥110.86/$ 30-day forward rate: 90-day forward rate: 180-day forward rate: Numata's WACC ¥110.46/$ 8.88% BioTron's WACC 9.45% Click on the icon located on the top-right corner of the data table in order to copy its contents into a spreadsheet.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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