The present value (PV) of the £5 million cash inflow computed by first discounting the £s and then converting into dollars is closest to ________
You are a U.S. investor who is trying to calculate the present value (PV) of £5 million cash inflow that will occur one year in the future. The spot exchange rate is S = $1.8839/£ and the forward rate is F1 = $1.8862/£. The appropriate dollar discount rate for this cash flow is 5.32% and the appropriate £ discount rate is 5.24%.
A) $8,961,420
B) $8,950,495
C) $8,954,615
D) $8,943,695
Answer: B
You might also like to view...
Which of the following dividend options, sometimes called the "fifth dividend option," is not offered by all insurers that sell participating life insurance coverage?
A) paid-up additions B) reduction of premiums C) accumulation of dividends at interest D) term insurance
Which of the following statements is not true?
A) A VPN provides both confidentiality and integrity. B) A VPN uses both authentication and encryption. C) A VPN uses a dedicated secure line. D) The primary use of VPNs is to establish secure communications among business partners.