Question
You have an investment opportunity in Japan. It requires an investment of $0.91 million today and will produce a cash flow of 100 million in
You have an investment opportunity in Japan. It requires an investment of
$0.91
million today and will produce a cash flow of
100
million in one year with no risk. Suppose the risk-free interest rate in the United States is
4.5%,
the risk-free interest rate in Japan is
1.7%,
and the current competitive exchange rate is
110
per dollar. What is the NPV of this investment? Is it a good opportunity?
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Fundamentals of corporate finance
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
9th edition
978-0077459451, 77459458, 978-1259027628, 1259027627, 978-0073382395
