Final answer:
To calculate the USD cost for GBP 1,000,000, we use the asking rate of 0.5116 provided by the currency broker, resulting in a total of USD 511,600. The student's provided choices seem to contain a typo as none match the calculated amount.
Step-by-step explanation:
The cash manager at AmFlex Company requires the conversion of GBP 1,000,000 into USD. When dealing with currency exchanges, the cost in the local currency (in this case, USD) is determined by the asking rate provided by the currency broker, which represents the price at which the broker is willing to sell the foreign currency. The quote given is GBP/USD 0.4865/0.5116, where 0.4865 is the bid price, and 0.5116 is the asking price.
To find out the USD cost for GBP 1,000,000, we will use the ask rate because it is the rate at which pounds are sold to the customer:
USD cost = GBP amount × ask rate
USD cost = 1,000,000 × 0.5116
USD cost = USD 511,600
Therefore, the USD cost of GBP 1,000,000 at the asking rate of 0.5116 is USD 511,600. The closest answer from the choices provided by the student would be USD 486,618, but there may be a typo given that the exact figure should be USD 511,600. It's important to discuss with the student any additional fees or potential typos in the provided answer choices.