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You are a Canadian investor who is trying to calculate the present value (PV) of a 15 million British pound cash inflow that will occur one year from now.The spot exchange rate is 1.5742 CAD/GBP and the forward rate is F1 = 1.5682 CAD/GBP.The appropriate dollar discount rate for this cash flow is 1.05% and the appropriate British pound discount rate is 1.45%.
-What is the present value of the dollar cash inflow computed by first converting the pounds into dollars and then discounting the dollars?
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