Omaha Co. is a U.S. firm considering a project in Germany which it has an initial cash outlay of $4 million. Omaha will accept the project only if it can satisfy its required rate of return of 11 percent. The project would definitely generate 1 million euros in one year from sales to a large corporate customer in Germany. In addition, it also expects to receive 3 million euros in one year from sales to other customers in Germany. Omaha's best guess is that the euro's spot rate will be $1.22 in one year. Today, the spot rate of the euro is $1.30, while the one-year forward rate of the euro is $1.27. If Omaha accepts the project, it would hedge all the receivables resulting from sales to the large corporate customer, and none of the expected receivables due to expected sales to other customers. What is the NPV of the project?

Select one:

a. $401,785.71

b. $425,325.25

c. $458,239.36

d. None of above