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International Machinery Company ( IMC ) is a Swedish multinational manufacturing company. Currently, IMC's financial planners are considering undertaking a 1 - year project in
International Machinery Company IMC is a Swedish multinational manufacturing company. Currently, IMC's financial planners are considering undertaking a year project in the United States. The project's expected dollardenominated cash flows consist of an initial investment of $ and a cash inflow the following year of $ IMC estimates that its riskadjusted cost of capital is Currently, US dollar will buy Swedish kronas. In addition, year riskfree securities in the United States are yielding while similar securities in Sweden are yielding
a If the interest parity holds, what is the forward exchange rate of Swedish krona per US dollar? Do not round intermediate calculations. Round your answer to two decimal places.
Swedish krona per US dollar
b If IMC undertakes the project, what is the net present value and rate of return of the project for IMC in home currency? Do not round intermediate calculations. Round your answers to two decimal places.
NPV:
Swedish kronas
Rate of return:
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