Due to the integrated nature of their capital markets, investors in both the U.S. and U.K. require the same real interest rate, 3.2%, on their lending. There is a consensus in capital markets that the annual inflation rate is likely to be 2.1% in the U.S. and 3.6% in the U.K. for the next three years. The GBP/USD rate is currently 1.3081. What is your expected future spot for GBP/USD three years from now?

a-ß, Inc., a high-tech in San Diego, whose stock trades on the NYSE exchange uses a MARR of 27.800% per year. If the chief financial officer (CFO) said the company expects to make a real rate of return of 20% per year on its investments over the next 3-year period, what is the company expecting the annual inflation rate to be over that time period? (Round the final answer to three decimal places.) The company is expecting an annual inflation rate of %.

Panhandle Inc. based in texas, exports products to a german firm and will receive payment of Euro5000000 in three months. On June 1, the spot rate of the euro was $1.09, and the 3-mpnth foward rate was $1.18. On June 1, Panhandle negotiated a foward contract with a bank to sell euro5000000 foward in three months. the spot rate of the euro on september 1 is $1.22. Panhandle will receive $_____ for the euros.

A small heat pump now costs $2,800 to purchase and install. It has a projected useful life of 18 years and will incur annual maintenance costs of $125 per year in real (year-zero) dollars over the useful life. These costs are projected to increase at 6% per year, which is the expected general inflation rate. The annual cost of electricity for the heat pump is $680 in year-zero dollars. Electricity prices are projected to increase at an annual rate of 9%. The firm's MARR, which includes an allowance for general price inflation, is 12% per year (im). No market value is expected from the heat pump at the end of the 18 years of service life. Click the icon to view the interest and annuity table for discrete compounding when i= 12% per year. a. What is the PW of owning and operating the heat pump? The PW is $ (Round to the nearest dollar.) b. (i) What is the AW, expressed in actual dollars, of owning and operating the heat pump? The AW is $. (Round to the nearest dollar.) (ii) What is the…

Two alternatives, A and B, are under consideration. Both have a life of five years. Alternative A needs an initial investment of $17,000 and provides a net revenue of $4,000 per year for five years. Alternative B requires an investment of $19,000 and has an annual net revenue of $5,000. All estimates are in actual dollars. Inflation is expected to be 2% per year for the next five years, and the inflation-free (real) MARR is 9.8% per year. Which alternative should be chosen?

Smith, a U.S. citizen, has been working as an executive of a  telecommunication company in U.S., and her annual salary in 2014 was US$220,000.  Her salary was expected to remain unchanged if she continued to work in the company. At the end of the year 2014, however, she was recruited by a media company in Brazil, so she started working in Brazil from January 2015, making an annual salary of US$250,000.  Assuming that the amount of her salary equals the amount of her contribution to the production in the company she works for, how much the annual U.S. GDP and GNP in 2015 was changed due to her job relocation?  Clearly show the reasoning for your answer.