A U.S. importer of electronic equipment owes 800,000 to a U.K. supplier in 12 months. Cur- rently, the exchange rate is $1.60/, and the importer believes that in 12 months the exchange rate will be either $1.80/ or $1.55/. The annual interest rate is 0.5% in the U.S. and 2% in U.K. b4-c) (5 points) What is the final cash flow? In other words, calculate the total dollar cost. Show final cash flows for each possible future exchange rates. Solution