Question
port Cruises is looking at a new project in Peru. The project will cost 10 million sols. The cash flows are expected to be 3.00
port Cruises is looking at a new project in Peru. The project will cost 10 million sols.
The cash flows are expected to be 3.00 million sols per year for 6 years. The current spot exchange rate is 3.5 sols per dollar.
The risk-free rate in the US is 3.0%, and the risk-free rate in Peru 5.0%. The dollar required return on the project is 11%.
Based on the NPV of the project, should Newport Cruises accept the project? Calculate the NPV in US dollars.
Round up to the nearest dollar and select the best answer
| A. | $3,405,581 | |
| B. | $769,032 | |
| C. | $3,626,032 | |
| D. | $548,438 |
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Economics For Investment Decision Makers
Authors: Sandeep Singh, Christopher D Piros, Jerald E Pinto
1st Edition
1118111966, 9781118111963
