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10.1_Bio Tron Medical Inc. Brent Bush, CFO of a medical device manufacturer, BioTron Medical, Inc., was approached by a Japanese customer, Numata, with a proposal
10.1_Bio Tron Medical Inc. 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 other month if it were given a 4.5% 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. Should Brent Bush accept Numata's proposal? Ans: (round up to the nearest $) a) Amount received in U.S. dollars by Seattle Scientific: $ b) Present value of dollar cash received: $ Attached spreadsheet if needed. 10.1_Bio Tron Medical Inc. 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 other month if it were given a 4.5% 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. Should Brent Bush accept Numata's proposal? Ans: (round up to the nearest $) a) Amount received in U.S. dollars by Seattle Scientific: $ b) Present value of dollar cash received: $ Attached spreadsheet if needed
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