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You want to invest in a project in LaLaLand. The project has an initial cost of LLL767,000. It is expected to produce cash inflows of
You want to invest in a project in LaLaLand.
- The project has an initial cost of LLL767,000.
- It is expected to produce cash inflows of LLL335,000 a year for 5years.
- The project will be worthless after that.
- The expected inflation rate in LaLaLand is 4% while it is only 2% in the U.S.
- The applicable interest rate for a project like this in LaLaLand is 13%.
- The current spot exchange rate is LLL1.0000 = $2.3456.
What is the Net Present Value of this project in LaLaLand's currency (i.e., in "LLL")?
Increase decimal places for any intermediate calculations, from the default 2 to 6 or higher, and only round your final answer to TWO decimal places: for example, 10,000.23. Do NOT use "currency units" in your answer.
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