The 2-year interest rate is 6.0% in Mexico and 3.0% in the USA.An American company forecast that its new plant in Mexico will produce a cash flow of 1.3 million pesos in year 2.If the current spot rate is MXN20.0 = USD1,what is the expected dollar cash flow from the plant in year 2?
A) $27.54 million.
B) $61,373.
C) $63,160.
D) $1.26 million.
Correct Answer:
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