Question: 4. You work for a U.S.-based firm that is considering a project with Brazil's government. If your firm accepts the project, your firm will receive

4. You work for a U.S.-based firm that is considering a

4. You work for a U.S.-based firm that is considering a project with Brazil's government. If your firm accepts the project, your firm will receive a single cash flow of one million Brazilian reals (BRL) in two years. The BRL spot rate is currently $0.18. The annualized interest rate for a 2- year period is 2% in the U.S. and 12% in Brazil. If interest rate parity holds and your firm plans to hedge the cash flow with a forward contract, what is the dollar amount of the cash flow that your firm will receive in two years if it accepts this project

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