Use the Information for the Question(s)below

question 49

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 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
• E)$9,004,167

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Definitions:

Phenotype

The set of observable characteristics or traits of an organism resulting from the interaction of its genotype with the environment.

Underlying

Constituting the fundamental or basic layer or aspect of something, often not immediately visible or apparent.

Observed

Noted or perceived through careful attention or surveillance.

Genotype

The genetic constitution of an individual organism, determining inherited characteristics.