Use the Information for the Question(s)below

question 1

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 discounting the £s and then converting into dollars is closest to:

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

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Definitions:

Indexed Variables

Variables in arrays or collections that are accessed by their index, which represents their position within the array or collection.

Subscripted Variables

Variables that are accessed using an index within brackets, often used in arrays or collections to denote a specific element.

Elements

Individual items or data in a collection, such as an array or list, in programming or general context.

Variables

Containers in programming that store data values which can be changed during the execution of a program.