[5 points] You have an investment opportunity in Japan. It requires an investment of $1 million today and will produce a cash flow of 114
[5 points] You have an investment opportunity in Japan. It requires an investment of $1 million today and will produce a cash flow of 114 million in one year with no risk. Suppose the risk-free interest rate in the United States is 4%, the risk-free interest rate in Japan is 2%, and the current competitive exchange rate is 110 per $1. What is the NPV of this investment? Is it a good opportunity?
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Authors: Douglas S. Ehrman
1st Edition
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