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On January 1st, Madison Co. ordered raw material from Japan and agreed to pay 100 million...

On January 1st, Madison Co. ordered raw material from Japan and agreed to pay 100 million yen for this order on April 1st. It negotiated a 3-month forward contract to obtain 100 million Japanese yen on that date at $.009. On February 1st, the Japanese firm informed Madison Co. that it won't be able to fulfill that order. The Japanese yen spot rate on February 1st is $.0087 and 2-month forward rate exhibits 3% discount. To offset its existing contract what kind of forward contract should Madison Co. negotiate? And what will be the profit/loss in U.S. dollars generated from this transaction?

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