The 2-Year Interest Rate Is 6

question 81

Multiple Choice

The 2-year interest rate is 6.0% in Mexico and 3.0% in the USA.An American company forecast that its new plant in Mexico will produce a cash flow of 1.3 million pesos in year 2.If the current spot rate is MXN20.0 = USD1,what is the expected dollar cash flow from the plant in year 2?

• A) $27.54 million.
• B) $61,373.
• C) $63,160.
• D) $1.26 million.

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