Gem Ltd. is engaged in the production of synthetic yarn and is planning to expand its production. In this context, the company is planning to import a multi-purpose machine from Osaka in Japan at a cost of ¥2,400 lakh. T

Gem Ltd. is engaged in the production of synthetic yarn and is planning to expand its production. In this context, the company is planning to import a multi-purpose machine from Osaka in Japan at a cost of ¥2,400 lakh. The company is in a position to borrow funds to finance import at 12% interest per annum with quarterly rests. India-based Osaka branch has also offered to extend credit of 90-days at 2% per annum against opening of an irrevocable letter of credit. Other information are as under: Present exchange rate : ₹100 = ¥246 90-day forward rate : ₹100 = ¥250 Commission charges for letter of credit is 4% per 12 months. Advise, whether the offer from the foreign branch should be accepted.