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A project in France yields a series of Euro cash flows as the following: -600 200 500 300 0 1 2 3 The exchange rate
A project in France yields a series of Euro cash flows as the following:
-600 | 200 | 500 | 300 |
0 | 1 | 2 | 3 |
The exchange rate of Euro today is $1.25 per Euro. The inflation rate in the euro zone is = 3%, the inflation rate in dollars is p$ = 6%. The cost of capital in USD is 10%. Assume that international fisher effect and purchasing power parity holds.
1. Please solve for the project IRR in Euros
2. Solve for the equivalent USD IRR.
3. Please solve for the project NPV in USD
4. Please solve for the project NPV in Euro
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