Thumper Inc. is a US based MNC. It has one of its subsidiaries in Malaysia. The subsidiary requires a loan of 5 million ringgits for a year. The interest rate in Malaysia is 65%. The holding company decides to borrow in dollars

Momo Island BHD, a Malaysian software company agreed to sell 5,000 chip units to a US company. The cost per chip unit is $150. The company allows 3 months credit.

The following details are available about currency options:

Exchange rate MYR/USD

Bid

Ask

Spot

4.1723

4.4173

3-Month Forward

4.4315

4.4330

3-Month call option strike price is MYR 4.3420

3-Month call option strike price is MYR 4.4280

Options premium is 1.5% of the contract value and the cost of capital is 11%.

Calculate the revenue or cost of the company.

(a) The cost to the company is MYR 3,321,000.00

(b) The revenue of the company is MYR 3,269,938.77

(c) The cost to the company is MYR 3,312,975.13

(d) The revenue of the company is MYR 3,372,061.23