One of the important components of multinational capital budgeting is to analyze the cash flows generated from subsidiary companies. Consider this case: Pellegrini Southern Inc. is a U.S. firm evaluating a project in Australia. You have the following information about the project:

The project requires an investment of AU$800,000 today and is expected to generate cash flows of AU$1,000,000 at the end of each of the next two years. The current exchange rate of the U.S. dollar against the Australian dollar is $0.7795 per Australian dollar (AU$). The one-year forward exchange rate is $0.8088 / AU$, and the two-year forward exchange rate is $0.8234 / AU$. The firms weighted average cost of capital (WACC) is 9.5%, and the project is of average risk.

What is the dollar-denominated net present value (NPV) of this project?

$801,755

$962,106

$721,580

$681,492

There are three major types of international credit markets. Read the following statement and then indicate which type of international credit market is being described.

Canoqola Domain Inc., a U.S.-based company, issued dollar-denominated bonds in China and India to finance a multinational project.

Eurocredit

Foreign bond

Eurobond