Mazuma Sdn. Bhd., a Malaysian company enters into a trade agreement with Mavin Int., a Singaporean company. This is the first transaction between the two companies and Mazuma Sdn. Bhd. requires a banker’s acceptance for the order of MYR1,000,000. The payment for the banker’s acceptance is to be received in six months and it comes with a per annum commission of 1.4%. If Mazuma Sdn. Bhd. decides to sell the banker’s acceptance to its local bank, the discount rate is 1.0% p.a.

How much is Mazuma Sdn. Bhd. expects to receive if the company takes the payment today?

a.

MYR 995,000

b.

MYR 996,000

c.

MYR 988,000

d.

MYR993,000