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2) A European auto parts company decides to invest in a 5-year project in New Zealand and the NPV of the project comes out positive.

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2) A European auto parts company decides to invest in a 5-year project in New Zealand and the NPV of the project comes out positive. But right after the investment is started, New Zealand goes into a currency crises and the Central Bank hikes interest rates. Explain what happens to the NPV of the project? (5 points)

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