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Expected inflation is 6.0% in the Indian rupee and 8.0% in the Japanese yen. Assume that the international parity conditions hold. Required returns for projects
Expected inflation is 6.0% in the Indian rupee and 8.0% in the Japanese yen. Assume that the international parity conditions hold. Required returns for projects in this risk class are: - iINR=15.0% in Indian rupee; and - JPYJP=17.1698% in Japanese yen The spot exchange rate is S0 INR/JPY = INR 0.7418/JPY. Given the above information, which of the following is closest to the NPV of the investment from the parent's perspective of Weird Imports a. The NPV from the parent's perspective is -INR 109.31 milion b. The NPV from the parent's perspective is -INR 113.14 million C. The NPV from the parent's perspective is -INR 113.87 million d. The NPV from the parent's perspective is -INR 107.13 million e. The NPV from the parent's perspective is -INR 111.78 million
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