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 (PV) 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 (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

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Definitions:

Genetic Instructions

The information encoded in an organism's DNA that guides growth, development, and functioning.

Gelatinous Layer

A viscous coating found on many aquatic organisms, which plays roles in protection and adhesion.

Ova

The female reproductive cells or eggs in animals and plants, capable of developing into a new individual upon fertilization.

Ovarian Follicle

A fluid-filled sac in the ovary that contains and nourishes an immature egg.