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 IS ....
Exchange rate in year 2 IS....
Exchange rate in year 3 IS...
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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International Business The Challenges Of Globalization
Authors: John J. Wild, Kenneth L. Wild
9th Edition
0134729226, 978-0134729220
