Elan Pharmaceutical, a US based company, is considering selling a new cholesterol-reducing drug to a prospective Indonesian distributor. The purchase price would be for IDR 1,650,000,000. At the current spot rate of USDIDR 9,450, this translates into approximately $175,000. The company has a minimum gross margin requirement for any sales which would equal $168,000 for this transaction. After numerous phone calls with money center banks, the CFO of Elan eventually found a 90 day forward rate of IDR 9,950. The future estimated spot rate in 90 days is IDR 9,600.

Using a forward contract, Elan can guarantee the value they will receive for the sale of the drugs. Based upon the information above, does using a forward contract meet the minimum gross margin criteria of the company?

Group of answer choices

No, forward contract value is $165,829

Yes, the forward contract value is $165,829

No, the forward contract value is $163,829

Yes, the forward contract value is $171,875