If the Exchange Rate Between the U

question 145

Multiple Choice

If the exchange rate between the U.S.dollar and the English pound went from $1.46 US = 1 pound to $1.60 US = 1 pound,then

• A)English goods have become more expensive for Americans.
• B)English goods have become less expensive for Americans.
• C)American goods have become more expensive for English citizens.
• D)American exports to England are likely to fall.

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Definitions:

Cost of Capital

The rate of return a company must pay investors to finance its assets, often used as a benchmark to evaluate the profitability of investments.

Present Values

The today's equivalent value of future money or cash flow series, calculated with a defined rate of return.

Cash Inflows

Money received by a business from its activities, e.g., sales of goods, provision of services, loans received.

Cash Outflows

Cash Outflows are the amounts of money paid out by a business in a period, including expenses, investments, and loans repayments.