Use the Information for the Question(s)below

question 27

Multiple Choice

Use the information for the question(s) below.
You are a U.S.investor who is trying to calculate the present value 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%.
-The present value of the £5 million cash inflow computed by first converting into dollars and then discounting is closest to:

• A)$8,950,495.
• B)$8,954,615.
• C)$8,943,695.
• D)$8,961,420.

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Definitions:

Proactive Interference

The phenomenon where earlier learned information interferes with the recall of information learned more recently, impacting memory retention.

State-dependent Learning

The phenomenon that information learned in a particular state of consciousness is more easily recalled when in that same state.

Hippocampus

A major component of the brain of humans and other vertebrates, associated with memory formation and spatial navigation.

Prefrontal Cortex

The part of the brain located at the front of the frontal lobes, involved in complex behaviors such as decision making, planning, and moderating social behavior.