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You work for Weird Fish imports, which is a firm whose home currency is the Russian ruble (RUB) and that is considering a foreign investment.
You work for Weird Fish imports, which is a firm whose home currency is the Russian ruble (RUB) and that is considering a foreign investment. The investment yields expected after-tax Mexican peso (MXN) cash flows (in millions) as follows: Expected inflation is 5.0% in the Russian ruble and 8.0% in the Mexican peso. Assume that the international parity conditions hold. Required returns for projects in this risk class are: - iRUB=21.0% in Russian ruble; and - iMXN=24.4571% in Mexican peso The spot exchange rate is S0RUBMXN=RUB4.0421/MXN. Given the above information, which of the following is closest to the NPV of the investment from the parent's perspective of Weird Fish Imports? a. The NPV from the parent's perspective is -RUB 513.43 million b. The NPV from the parent's perspective is -RUB 532.87 million c. The NPV from the parent's perspective is -RUB 495.28 million d. The NPV from the parent's perspective is -RUB 486.05 million e. The NPV from the parent's perspective is -RUB 502.55 million
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