Use the Following Information to Answer the Question(s) Below

question 30

Multiple Choice

Use the following information to answer the question(s) below.
Rearden Metal, a U.S. manufacturer, has made a purchase from d'Anconia Copper and is expecting a cash
outflow of 2 million ARS (Argentine Pesos) in six months. The currency spot rate is $0.2500/ARS and the
six-month forward rate is F6months = $0.2470/ARS. The appropriate annual discount rate for the
Argentine Peso is 6.5% and the annual discount rate for the U.S. dollar is 4%.
-The present value of Rearden Metal's cash outflow computed by first converting to dollars and then discounting the cash flow at the appropriate U.S.Dollar rate is closest to:

• A)$469,500.
• B)$475,000.
• C)$481,000.
• D)$484,500.

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Definitions:

Atrium

A central room or space in a building, often open to the sky.

Arteriosclerosis

The thickening, hardening, and loss of elasticity of the walls of arteries, often leading to restricted blood flow which can result in cardiovascular issues.

Bruit

A sound, usually abnormal, heard in auscultation that indicates the presence of turbulent flow within a blood vessel.

Auscultation

The act of listening to sounds within the body, typically using a stethoscope, as a method of diagnosing diseases or conditions.