How much would you expect the small mac to cost next year, Financial Management

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How much would you expect the small mac to cost next year

If PPP holds for "Small Macs," and the 1-year U.S. inflation rate is 1% per annum, and the Small Mac in Mexico costs the equivalent of $2.12oday, how much would you expect the Small Mac to cost next year in pesos?

Again, assume a 1.12% U.S. Treasury rate, a 7.78% peso interest rate, and a spot rate that is 0.09230 peso/$.

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