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If cash flows were received on a continuous basis, the present-value payback period would be 8years
+ ($657/$2,332.177) years = Syears + 0.28years = 8.28years. In conclusion, the nominal payback
period is shorter than the cumulative payback period
3c) If we are to use the monetary approach to exchange rate determination, what will be the predicted
effect on the exchange rate of domestic currency if domestic real income increases?
According to this approach, the demand for money depends upon the level of real income, the
