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1. You are analyzing a project with an initial cost of 130,000. The project is expected to return 20,000 the first year, 50,000 the second
1. You are analyzing a project with an initial cost of 130,000. The project is expected to return 20,000 the first year, 50,000 the second year, and 90,000 the third and finan year. There is no salvage value. The current spot rate is .6211. The nominal risk-free return is 5.5 percent in the U.K. and 6 percent in the U.S. The return relevant to the project is 14 percent in the U.S. Assume that uncovered interest rate parity exists. Using the Home Currency Approach what is the net present value of this project in U.S. dollars? Indicate if the firm should accept or reject the project? In the CURRENCY TRADING section of The Wall Street Journal, the following appeared under the heading OPTIONS: Philadelphia Exchange Puts Swiss France 19:33 Last 62,500 Swiss Francs-cents per unit Vol. Last Vol. . 68 May 10.30 169 May b.50 Which combination of the following statements are true? C) The time values of the 68 May and 69 May put options are respectively.30 cents and 50 cents. (1) The 68 May put option has a lower time value (price) than the 69 May put option
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