Question
The spot exchange rate today is 125 = $1. The U.S. discount rate is 10%; inflation over the next three years is 3% per year
The spot exchange rate today is 125 = $1. The U.S. discount rate is 10%; inflation over the next three years is 3% per year in the U.S. and 2% per year in Japan. There is a project that requires an initial investment of 1,000,000, and generates 500,000 each year in the following 3 years. Find the dollar cash flows to compute the dollar-denominated NPV of this project. Exchange rate in year 1 = Blank 1. Fill in the blank, read surrounding text. . (Round your answer to 2 decimal places) Exchange rate in year 2 = Blank 2. Fill in the blank, read surrounding text. . (Round your answer to 2 decimal places) Exchange rate in year 3 = Blank 3. Fill in the blank, read surrounding text. . (Round your answer to 2 decimal places) Once you have the exchange rates for the next three years, find dollar cash flows to compute the dollar-denominated NPV = $
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