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(Related to Checkpoint 19.3) (International capital budgeting) An American firm is considering a new project in the country of Geeblaistan. This new project will produce
(Related to Checkpoint 19.3) (International capital budgeting) An American firm is considering a new project in the country of Geeblaistan. This new project will produce the following cash flows, , measured in BLAs, the currency of Geeblaistan, which are expected to be repatriated to the parent company in the United States. In addition, assume the risk-free rate in the United States is 5 percent, and that this project is riskier than most and, as such, the firm has determined that it should require a premium of 15 percent over the risk-free rate. Thus, the appropriate discount rate for this project is 20 percent. In addition, the current spot exchange rate is 0.9039BLA/$, and the 1-year forward exchange rate is 0.9824BLA/$. What is the project's NPV? The project's NPV is $ million. (Round to two decimals places.) Data table
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