What is the dollar amount of cashflows

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Benevolence Company considers a project with Thailand's government. If it accepts the project, it will definitely receive one lump sum cashflow of 10 million Thai baht in years. The spot rate of the Thai baht is presently $0.03. The annualised interest rate for a 5-year period is 4% in the U.S. and 17% in Thailand. Interest rate parity exists. Benevolence plans to hedge its cashflows with a forward contract. What is the dollar amount of cashflows that Benevolence will receive in five years if it accepts this project?

Reference no: EM133115604

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