A firm in US is considering investing in a subsidiary in Japan. The subsidiary will cost 2 billion Yen and will generate cash inflows of 200M Yen per year forever. The current exchange rate is Yen110/$. The current risk-free rate of interest in the U.S. is 5% and the risk-free rate in Japan is 1%. What is the cash flow in year 1 if you are using the home currency approach?

		$2.11M
		$1.81M
		$1.74M
		$1.89M
		$1.98M