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Consider the following international investment opportunity: Year 0 Year 1 Year 2 Year 3 (50,000 (15,000 (15,000 (20,000 The current exchange rate is $1.60 =

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Consider the following international investment opportunity: Year 0 Year 1 Year 2 Year 3 (50,000 (15,000 (15,000 (20,000 The current exchange rate is $1.60 = 1.00. The inflation rate in the U.S. is 3 percent and in the euro zone 2 percent. The appropriate cost of capital to a U.S.-based firm for a domestic project of this risk is 8 percent. 73. Find the euro-zone cost of capital to compute is the dollar-denominated NPV of this project

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