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Zeda Incorporated, a U . S . MNC , is considering making a fixed direct investment in Denmark. The Danish government has offered Zeda a
Zeda Incorporated, a US MNC is considering making a fixed direct investment in Denmark. The Danish government has offered Zeda a concessionary loan of DKK at a rate of percent per annum. The normal borrowing rate is percent in dollars and percent in Danish krone. The loan schedule calls for the principal to be repaid in three equal annual installments. What is the present value of the benefit of the concessionary loan? The current spot rate is DKK per $ and the expected inflation rate is percent in the United States and percent in Denmark.
What is the Present Value of the benefit of the concessinonary loan?
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