Allen, CFO of a microchip

manufacturer company Nemco, Inc., was approached by a Japanese customer with a

proposal to pay cash (in yen) for its typical orders of ¥25,500,000 every other

month if it were given a 5% discount. The current terms are delayed payment

after 30 days with no discounts. Using the following quotes and estimated cost

of capital for the Japanese customer, Jason will compare the proposal with

covering yen payments with forward contracts. Spot rate : ¥112.5/$30-day

forward rate : ¥111.5/$, Nemco WACC : 9.2% p.a. How much in U.S. dollars will

Nemco, Inc receive with the discount and with no discount but fully covered

with a forward contract? Should he accept the offer made by the Japanese

customer? (use 360 days convention)