Mia Caruso Enterprises, a U.S. manufacturer of children's toys, has made a sale in India and is expecting a 400-million-rupee cash inflow in one year. (The currency of India is the rupee.) The current spot rate is S=$0.022/rupee and the one-year forward rate is F1=$0.0210/rupee.

a. What is the present value of Mia Caruso's 400-million-rupee inflow computed by first discounting the cash flow at the appropriate India rupee discount rate of 10% and then converting the result into dollars?

b. What is the present value of the 400-million-rupee cash inflow computed by first converting the cash flow into dollars and then discounting it at the appropriate dollar discount rate of 5%?

c. What can you conclude about whether these markets are internationally integrated, based on your answers to (a) and (b)?