Question
The US based company is investing in a two year project in Europe. The initial investment is euro 10000. The expected cash inflow in the
The US based company is investing in a two year project in Europe. The initial investment is euro 10000. The expected cash inflow in the year one is 6000 euro. And the year two is 8000 euro. The risk free rate in US is 3% and Europe 2%. If the spot rate is $1.25/euro and the required rate of return of the project is 14%. Calculate the NPV of the project in dollars.
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Fundamentals of Investment Management
Authors: Geoffrey Hirt, Stanley Block
10th edition
0078034620, 978-0078034626
