Domestic NPV approach. Farbucks is thinking of expanding to South Korea. The current indirect rate for dollars and South Korean won is 1,018 won per dollar. The expected inflation rate in South Korea should hover near 0.4% for the next five years. The expected U.S. inflation rate should stay around 3.9%. The discount rate for expanding is 15% for Farbucks. Given the following projected cash flows for the expansion project, use the domestic NPV approach to determine whether Farbucks should expand to South Korea.

Year 0: initial investment costs of

90, 000,000

won per coffee shop

Year 1 cash flow:

15,000,000 won

Year 2 cash flow:

40,000,000won

Year 3 cash flow:

70,000,000 won

Year 4 cash flow:

90,000,000 won

Year 5 cash flow:

40,000,000 won

Domestic currency approach in multinational capital budgeting consists of the following steps:

Step 1: Calculate the forward exchange rates.

Step 2: Convert all cash flows in foreign currency into dollars using current and forward exchange rates.

Step 3: Convert all future dollars into present value with the domestic discount rate.

Step 4: Add the net present value of the outflow and inflow.

Step 5: Accept the project if its net present value (NPV) is positive and reject if negative.

First, complete step 1 by calculating the forward rates.

The current indirect exchange rate is 1,018 for dollars and South Korean won. The inflation rate in South Korea is expected to hover near 0.4% for the next five years and the U.S. inflation rate is expected to stay around 3.9%.

What is the 1-year forward indirect rate for dollars and South Korean won?

won per $(Round to four decimal places.)