U-Wise Manufacturing Berhad, a manufacturer of components, has signed a contract to purchase electronic components for its production line. The company opts to purchase the equipment either from the United States or Japan. Both the United States and Japan suppliers have agreed with the following terms:

The United States supplier term Japan supplier term The quoted price US$280,000 29,120,000 Payment terms i. Seventy-five per cent of the contract price must be made immediately once the contract is signed with a 15 per cent sales discount. ii. To meet this prompt payment, the importer would have to use its clean overdraft facility for one month, which charges 12 per cent per annum. iii. The remaining balance is to be settled one month later.

i. Half of the contract price is paid immediately upon signing the contract with a 9 per cent sales discount. ii. Seventy per cent of the balance is to be settled one month later. iii. The remaining balance is to be settled two months later.

U-Wise Manufacturing Berhad would forward a contract to defer the payment to avoid foreign exchange risk for all the credit transactions. The exchange rates for currencies are given below. Ignore commission, interest rate and charges.

US Dollar (US$) Japanese Yen () Mid Rates Bid Ask Mid Rates Bid Ask Spot 129.68 4.1631 4.1756 1.4484 0.0370 0.0380 Forward Rates 1-month 129.87 10 11 1.4458 25 37 2-month 128.53 18 20 1.4367 50 59 3-month 127.94 30 36 1.4282 59 62

Using the provided foreign exchange quotations, determine which suppliers U-Wise Manufacturing Berhad should sign the contract. Show your calculations in Ringgit Malaysia (RM) and decide which country to import the electronic component.