The current indirect exchange rate is 12 pesos per dollar.The cash inflow in pesos is 100,000 in two years and the discount rate is 10%.During this time,the anticipated annual inflation rate is 6% in the United States and 14% in Mexico.What is the present value of the 100,000 pesos in U.S.dollars after conversion from pesos to dollars if you are using current and forward exchange rates?
A) $5,984.35
B) $5,954.36
C) $5,924.46
D) $5,936.54
Correct Answer:
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