A project has an initial cost of $1\mathrm{.}2$ million and expected cash inflows of $400,000,500,000,$ and $600,000$ for Years $1$ to $3,$ respectively. Assume

the current spot rate is $\mathrm{.}73$ and the nominal risk$-$free returns are $4$ percent in the U$.$K$.$ and $3$ percent in the U$.$S$.$ If uncovered interest rate parity

exists, what is the net present value of this project in U$.$S$.$ dollars using the home currency approach? Assume the project's U$.$S$.$ discount rate is $12$

percent.

Multiple Choice

$-$$$56,359$

$-$$$104,040$

$-$$$71,067$

$$26,422$

$$92,009$