Suppose your firm does business in Mauritius.Business done in Mauritius is conducted in Mauritian Rupee (MUR).The spot rate of the Mauritian Rupee is USD .037/MUR. Some expect it to hold into next year. Next year's projected cash flows follow:

Country US (USD millions) Mauritius (MUR millions)

Sales 83.0 165.0

COGS 5.9 871.5

Expenses 31.0 51.5

Interest 6.5 0

Now suppose you have a colleague who believes in PPP between the US and Mauritius. If inflation is 7% in Mauritius and -0.5% in the US, what is your approximate projected cash flow in the next year (in USD)?

USD 39.6 Million

USD 26.0 Million

USD 13.5 Million

- USD 11.2 Million