The San Pearl Brewery Co. of Texas, has received an order for 10,000 cases of Pearl Beer from Agave Importers in Caracas, Venezuela. El Presidente Maduro is furious! "Beer from the North'!?..How could they! Payment to be in Bolivars Fuerte (VEF). The beer will be shipped to Agave under the terms of a Letter of Credit issued by the Bank of Venezuela on behalf of Agave for the benefit of Pearl Brewery (Advising Bank is Wells Fargo Bank). The letter of credit specifies that the face value of the shipment, VEF 943,931) (Venezuelan Bolivars Fuerte VEF), will be paid

according to the following terms after the Bank of Venezuela accepts a time draft drawn in accordance with the terms of the letter of credit.

Terms:

50% Down-payment at the Spot Rate

50% in 180 Days.

The current discount rate in London on 180-day banker's acceptances is 8% per annum,

and Pearl's weighted average cost of capital is 12% per annum. The commission for

selling a banker's acceptance in the discount market is 3% of the face amount.

(a) Would the Pearl Brewery Company gain by holding the acceptance to

maturity as compared to discounting the banker's acceptance at once?