You want to invest in a project in Dreamland. The project has an initial cost of DM820,000 and is expected to produce cash inflows of DM314,000 a year for three years. The project will be worthless after three years. The expected inflation rate in Dreamland is 4.25 percent while it is 2.3 percent in the U.S. The applicable interest rate in Dreamland is 6.05 percent. The current spot rate is DM1 = US$.82. What is the net present value of this project in U.S. dollars using the foreign currency approach?

		$18,277.26
		$16,861.94
		$17,358.50
		$15,210.93
		$19,432.76

You are expecting a payment of CAD305,000 two years from now. The risk-free rate of return is 2.2 percent in the U.S. and 2.6 percent in Canada. The inflation rate is 2.1 percent in the U.S. and 2.7 percent in Canada. Assume the current exchange rate is CAD1 = $.7626. How much will the payment two years from now be worth in U.S. dollars?

		$225,877
		$246,319
		$230,743
		$236,350
		$252,800