The current indirect exchange rate is 20 pesos per dollar.The anticipated annual inflation rate is 2% in the United States and 5% in Mexico.If the cash inflow in pesos is 250,000 in one year and the discount rate is 8%,what is the present value of the 250,000 pesos in U.S.dollars after conversion from pesos to dollars using the forward exchange rate?
A) $9,675.34
B) $10,328.21
C) $11,243.39
D) $12,142.86
Correct Answer:
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