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You have an investment opportunity in Japan. It requires an investment of $ 0.94$0.94million today and will produce a cash flow ofyen 102102million in one
You have an investment opportunity in Japan. It requires an investment of $ 0.94$0.94million today and will produce a cash flow ofyen 102102million in one year with no risk. Suppose the risk-free interest rate in the United States is 4.5 %4.5%,the risk-free interest rate in Japan is 1.5 %1.5%,and the current competitive exchange rate is yen 110110per dollar. What is the NPV of this investment? Is it a good opportunity?
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