Scenario Probability $1.12 Pound Spot Rate in 1 Year 25.00% 50.00% Option Premium 30.03 Net Amount Received Per Unit Less Premium $1.17 $1.18 Dollar Amount Received from Hedging 200,000 Pounds $234,000 $236,000 $246,000 Exercise Options? yes 1 2 $0.03 no $1.21 $1.26 3 25.0096 $0.03 $1.23 no Goodwin would like to analyze the possible dollar cash inflows from not hedging the receivables. Using this strategy case, the possible dollar cash Inflows are shown in the following table: Scenario Probability $1.12 Pound Spot Rate in 1 Year 25.00% Total Price Paid for 200,000 Pounds $224,000 2 $1.21 $242,000 50.00% 25.00% 3 $1.26 $252.000 Given the information in the table, the expected value of dollar cash inflows when not hedging the receivables, but simply exchanging pounds for dollars at the spot rate in one year is 5 for all 200,000 pounds