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Assume you purchase a call option to buy dollars in each year at USD/JPY=110 (meaning the spot rate will not go above 110). The call
Your firm has a project that will pay 10,000,000 JPY each year for the next 3 years. The initial cost of the project was 225,000 USD. The current USD/JPY=108.51. If the USD/JPY spot rates are as follows: Spot rate after year 1-115.32 Spot rate after year 2=104.31 Spot rate after year 3=125.67
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To calculate the NPV of the project we need to convert the JPY cash flows to ...
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
