You are a Canadian investor who is trying to calculate the present value (PV) of 5 million cash inflow that will occur one year in the future. The spot exchange rate is S = 1.8839 CAD/GBP and the forward rate is F1 = 1.8862 CAD/GBP. The appropriate dollar discount rate for this cash flow is 5.32% and the appropriate GBP discount rate is 5.24%.

Part a) Calculate the present value (PV) of the 5 million cash inflow computed by first discounting the pounds and then converting into dollars.

Part b) Calculate the present value (PV) of the 5 million cash inflow computed by first converting into dollars and then discounting it.