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5. JamEx Pro Ltd., a Jamaican company, is considering a new capital budgeting project in the USA. The projected cash flows from the investment
5. JamEx Pro Ltd., a Jamaican company, is considering a new capital budgeting project in the USA. The projected cash flows from the investment are shown below (measured in US$) and are expected to be repatriated to the parent company in Jamaica. Year Cash Flow (US$ 'million) 0 1 -25 8 7.5 9 2 3 4 5 3 point We have determined that the appropriate risk-adjusted discount rate to be used in evaluating the project is 18 percent. In addition, the current spot exchange rate is J$85.75/US$ and the 1-year forward exchange rate is J$86.20/US$. Does JamEx accept or reject?
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