Annies aunt, Coseta, also invested in the same venture, but did not hedge. Ex post, she bought USD at the following spot exchange rates in years one through three: $0.05, $0.04, and $0.03.

9) What was her USD cash inflow for year 1?

a. $1,050,000

b. 1,400,000

c. 960,000

d. 840,000.

10) What was her USD cash inflow for year 2?

a. $1,050,000

b. 1,400,000

c. 960,000

d. 840,000

e. 630,000.

11) What was her USD cash inflow for year 3?

a. $1,050,000

b. 1,400,000

c. 960,000

d. 850,000

e. 630,000

12) Which of the following NPVs would Coseta have earned, if she also requires a 20% rate of return?

A) -$1,419,578

B) -$1,299,263

C) -$1,410,000

D) -$1,539,371

E) -$1,177,083.

13) Which IRR would Coseta have earned?

a. 18%

b. 12

c. -5.67

d. -8.93

e. 7.77.

14) Coseta would have been better-off placing her $3 million in a U.S. bank savings account.

A) TRUE

B) FALSE