Determine the expected amount of dollars to be paid

Reference no: EM13298555

Today's spot rate of the Mexican peso in $.10. Assume that purchasing power parity holds. The U.S. inflation rate over this year is expected to be 7 percent, while the Mexican inflation over this year is expected to be 3 percent. Wake forest Co. plans to import from Mexico and will need 20 million Mexican pesos in one year. Determine the expected amount of dollars to be paid by the wake Forest Co. for the peso in one year.

Reference no: EM13298555

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