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You work for a firm whose home currency is the South Korean Won (KRW) and that is considering a foreign investment based in Spain. The
You work for a firm whose home currency is the South Korean Won (KRW) and that is considering a foreign investment based in Spain. The investment yields expected after-tax Euro (EUR) cash inflows (in millions) as follows: EUR259 in Year 1, EUR180 in Year 2, EUR429 in Year 3 and EUR218 in Year 4. The initial capital outlay for the project has been identified as a total of EUR372 million. From the project's perspective the required return is 15.36% p.a, while from the parent's perspective, the required rate of return is 10.41% p.a. The real interest rate in South Korea is 4.67% and international parity conditions hold for all time periods. The spot exchange rate is EURO.00075/KRW. How larger is the NPV when evaluated from the parent's perspective relative to the NPV from the project's perspective? O a. KRW0.000 million O b. KRW520,410.389 million Oc. KRW0.293 million O d. -KRW496,000.00 million Oe. Of. There is not enough information to answer this question None of the options in this question are correct Time left 0:58:10 4
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