A bank is evaluating a lease proposal for industrial machinery costing 10,000,000. The lease is structured as an ordinary annuity with equal annual rentals payable at the end of each year for 10 years. The bank requires an internal rate of return of 11 percent per annum on this asset, and the salvage value of the machine at the end of 10 years is estimated at 1,500,000. What should be the annual lease rental amount?

A US firm expects to receive €2,000,000 in 3 months. The spot exchange rate is $1.15 / €1. The 3-month borrowing rate in the US is 4% p.a. and the 3-month deposit rate in the Eurozone is 6% p.a. Using a Money Market Hedge, what is the dollar value of the receipt (to the nearest thousand $)?

A US-based company is due to receive €2,000,000 in 3 months. If the 3-month forward exchange rate is $1.137656 per €1, what is the dollar value of the receipt using a forward hedge?