You Are Expecting a Payment of 500,000PLN 3 Years from Now.The

question 57

Multiple Choice

You are expecting a payment of 500,000PLN 3 years from now.The risk-free rate of return is 4 percent in the U.S.and 2 percent in Poland.The inflation rate is 4 percent in the U.S.and 1 percent in Poland.Currently, you can buy 380PLN for 100USD.How much will the payment 3 years from now be worth in U.S.dollars?

• A)$138,700
• B)$138,900
• C)$139,800
• D)$142,300
• E)$144,169

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Definitions:

Withdrawals

Money taken out from a business by its owner(s) for personal use, reducing the owner's equity in the business.

Assets

Economic resources owned by a business or individual that are expected to benefit future operations.

Expenses

Financial outlays or obligations incurred by a company as part of its operational activities, leading to a reduction in owners' equity.

Compound Entry

An accounting entry that involves more than two accounts, where there are multiple debits and/or credits in a single transaction.