- Scan Question
- + Post
- Get Coins
To convert a project's future cash flows into another currency, we need to use today's spot exchange rates. Question options:
Zylex Corporation's German unit is looking to borrow €4.5 million from Deutsche Bank. Deutsche Bank quotes a rate of three-month LIBOR plus 0.5 percent for the 90-day loan. Currently, the three-month LIBOR is 4.175 percent. If the exchange rate on the payoff date is €0.8334/$, what is the dollar cost of the loan? (Round your final answer to two decimal places.)
False - To convert a project's future cash flows into another currency, we need to use the exchange rate at the time that the cash flows actually occur. That is, we need to use the spot exchange rates in the future (at the time of cash flow's occurrence) and not today's spot exchange rates
To convert a project's future cash flows into another currency, we need to use today's spot...
1. Sheridan Pharma just received revenues of $3,164,700 in Australian dollars (A$). Management has the following exchange rates: A$2.69500/£ and $1.5906/£. What is the U.S. dollar value of the company’s revenues? (Round intermediate calculation to 4 decimal places, e.g. 15.2578 and final answer to the nearest whole dollar, e.g. 5,275.)\ 2. Barclays Bank of London has offered the following exchange rate quotes: ¥196.50/£ and Korean won 13.7470/¥. What is the cross rate between the Korean won and the British pound?...