"A French company is considering a project in US. The project will cost $100M. The cash flows are expected to be $30M per year for 5 years. The current spot exchange rate is $1.20/. The risk - free rate in the US is 1%, and the risk - free rate in Europe is 2%. The dollar required return on the project is 12%. Find the NPV in foreign currency using foreign currency approach. The answers below are in millions." -37.281 161.634 8.143 1.631 82.136
"A French company is considering a project in US. The project will cost $100M. The cash flows are expected to be $30M per year for 5 years. The current spot exchange rate is $1.20/. The risk - free rate in the US is 1%, and the risk - free rate in Europe is 2%. The dollar required return on the project is 12%. Find the NPV in foreign currency using foreign currency approach. The answers below are in millions." -37.281 161.634 8.143 1.631 82.136
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter27: Multinational Financial Management
Section: Chapter Questions
Problem 14P
Related questions
Question
!["A French company is considering a project in US. The
project will cost $100M. The cash flows are expected to
be $30M per year for 5 years. The current spot
exchange rate is $1.20/. The risk - free rate in the US is
1%, and the risk - free rate in Europe is 2%. The dollar
required return on the project is 12%. Find the NPV in
foreign currency using foreign currency approach. The
answers below are in millions."
-37.281 161.634 8.143 1.631 82.136](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb5f6fcc6-85d1-44f7-9f8a-b9ff2a3e7b3e%2Fcaebd175-199b-44a0-af25-d24235b57ceb%2F3cy8w9p_processed.jpeg&w=3840&q=75)
Transcribed Image Text:"A French company is considering a project in US. The
project will cost $100M. The cash flows are expected to
be $30M per year for 5 years. The current spot
exchange rate is $1.20/. The risk - free rate in the US is
1%, and the risk - free rate in Europe is 2%. The dollar
required return on the project is 12%. Find the NPV in
foreign currency using foreign currency approach. The
answers below are in millions."
-37.281 161.634 8.143 1.631 82.136
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