Use the Information for the Question(s)below

question 10

Multiple Choice

Use the information for the question(s) below.
You are a Canadian investor who is trying to calculate the present value (PV) of £5 million cash inflow that will occur one year in the future.The spot exchange rate is S = 1.8839 CAD/GBP and the forward rate is F₁ = 1.8862 CAD/GBP.The appropriate dollar discount rate for this cash flow is 5.32% and the appropriate GBP discount rate is 5.24%.
-The present value (PV) of the £5 million cash inflow computed by first discounting the pounds and then converting into dollars is closest to:

• A)$8,961,420
• B)$8,950,495
• C)$8,954,615
• D)$8,943,695
• E)$9,004,167

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Definitions:

Osmoreceptors

Specialized sensory neurons that detect changes in osmotic pressure and play a critical role in maintaining osmotic balance within the body.

Oncotic Pressure

The part of blood osmotic pressure exerted by proteins in the plasma, crucial for maintaining fluid balance across capillary walls.

Antecubital Vein

A prominent vein located in the front of the elbow, often used for drawing blood or administering intravenous therapies.