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10. Ostrom, Inc. is considering a project in Turkey, The project requires an initial investment of 800 Turkish lira and is expected to generate annual

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10. Ostrom, Inc. is considering a project in Turkey, The project requires an initial investment of 800 Turkish lira and is expected to generate annual cash flows of 600 Turkish lira per year for each of the next two vears. The project's expected salvage value is zero. Ostrom's required rate of return is 25%. The current spot rate for the pound is $0.17381. and Ostrom uses the current spot rate to forecast the expected spot rate. Find the project's expected net present value in U.S. dollars. a. At the end of year one, Ostrom receives an offer of $85 for the project. The spot rate at the end of year one is $0.170. Find the present value of divestiture (present value of accepting the offer.) Should Ostrom accept the offer? Explain your response with the necessary calculations. b

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