In 1803, the U.S. doubled in size with the Louisiana Purchase. That well-known real estate mogul Napoleon Bonaparte sold us 827,000 square miles (529,280,000 acres–there are 640 acres in a square mile). We paid $15 million. Assume that part of the US is worth an average of $7,500 per acre in 2020. What is the annual rate of return of this purchase for the U.S.?

In 1803, the U.S. doubled in size with the Louisiana Purchase. That well-known real estate mogul Napoleon Bonaparte sold us 827,000 square miles (529,280,000 acres–there are 640 acres in a square mile). We paid $15 million. Assume that part of the US is worth an average of $7,500 per acre in 2020. What is the annual rate of return of this purchase for the U.S.?

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter11: Managing Transaction Exposure

Section: Chapter Questions

Problem 1ST

See similar textbooks

Similar questions

Please show the step by step solution in excel and the formulas used please! In 1803, the U.S. doubled in size with the Louisiana Purchase. That well-known real estate mogul Napoleon Bonaparte sold us 827,000 square miles (529,280,000 acres–there are 640 acres in a square mile). We paid $15 million. Assume that part of the US is worth an average of $7,500 per acre in 2024. What is the annual rate of return of this purchase for the U.S.?
Please put the solution in an excel spreadsheet to get the correct answer and please explain the steps for each formula in excel In 1803, the U.S. doubled in size with the Louisiana Purchase. That well-known real estate mogul Napoleon Bonaparte sold us 827,000 square miles (529,280,000 acres–there are 640 acres in a square mile). We paid $15 million. Assume that part of the US is worth an average of $7,500 per acre in 2024. What is the annual rate of return of this purchase for the U.S.?
The CMOS Electronics Company is considering a capital investment of 50,000,000 pesos in an assembly plant located in a foreign country. Currency is expressed in pesos, and the exchange rate is now 100 pesos per U.S. dollar. The country has followed a policy of devaluing its currency against the dollar by 10% per year to build up its export business to the United States. This means that each year the number of pesos exchanged for a dollar increases by 10% (fe = 10%), so in two years (1.10)2(100) = 121 pesos would be traded for one dollar. Labor is quite inexpensive in this country, so management of CMOS Electronics feels that the proposed plant will produce the following rather attractive ATCF, stated in pesos: If CMOS Electronics requires a 15% IRR per year, after taxes, in U.S. dollars (ius) on its foreign investments, should this assembly plant be approved? Assume that there are no unusual risks of nationalization of foreigninvestments in this country.
Suppose you are a U.S. investor who is planning to invest $785,000 in Mexico. Your Mexican investment gains 10%. If the exchange rate moves from 12.2 pesos per dollar to 12.5 pesos per dollar over the period, what is your total return on this investment?
Suppose that you hold a piece of land in the City of London that you may want to sell in one year. As a U.S. resident, you are concerned with the dollar value of the land. Assume that, if the British economy booms in the future, the land will be worth £18 and one British pound will be worth $1.25. If the British economy slows down, on the other hand, the land will be worth less, i.e., £23 million, but the pound will be stronger, i.e., $1.37/£. You feel that the British economy will experience a boom with a 60% probability and a slow-down with the remaining probability. Estimate the Covariance between P and S (X.XXXX)
Suppose you exported something from Mexico to the US and were quoted a price (payable immediately) of 20,000 Pesos. What would your receipt in US dollars be? _____________.
In 1985, a given Japanese imported automobile sold for 1,476,000 yen, or $8,200. If the car still sold for the same amount of yen today but the current exchange rate is 141 yen per dollar, what would the car be selling for today in U.S. dollars?
Suppose then that we have three London seats, New York and Madrid In the first, the buyer type is 109,590 Yen per Dollar, in London the selling rate is 180,000 Yen per Pound Sterling while in New York is 1,677 dollars per British Pound  Suppose we have 100,000,000 yen  Carry out the arbitrage indicate the gain in terms absolute and percentage terms
Suppose you are a U.S. investor who is planning to invest $845,000 in Mexico. Your Mexican investment gains 10.6 percent. If the exchange rate moves from 12.8 pesos per dollar to 13.1 pesos per dollar over the period, what is your total return on this investment? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
peter minuit, director-general of the dutch west india company in North America bought Manhattan island from native Americans 60 guilders in 1626. it is reported that 60 guilders was worth about $24 at the prevailing exchange rate. if the return on investment for the last 394years was 6% per year, who did a better decision? The price of Manhattan island is estimated US$4 trilion in 2020
A developing country has determined that each additional $1 billion of investment in capital goods adds 0.3 percentage point to its long-run average annual rate of growth of per capita real GDP. Domestic entrepreneurs recently began to seek official approval to open a range of businesses employing capital resources valued at $27 billion. If the entrepreneurs undertake these investments, and assuming that other things are equal, calculate the nation's long-run average annual rate of growth of per capita real GDP up to a fraction of a percentage point. nothing percent. (Round your answer to one decimal place.)
Delta Company, a U.S. MNC, is contemplating making a foreign capital expenditure in South Africa. The initial cost of the project is ZAR13,600. The annual cash flows over the five-year economic life of the project in ZAR are estimated to be 4,280, 5,080, 6,070, 7,060, and 7,900. The parent firm’s cost of capital in dollars is 9.5 percent. Long-run inflation is forecasted to be 3 percent per annum in the United States and 7 percent in South Africa. The current spot foreign exchange rate is ZAR/USD = 3.75. a. Calculating the NPV in ZAR using the ZAR equivalent cost of capital according to the Fisher effect and then converting to USD at the current spot rate. b. Converting all cash flows from ZAR to USD at purchasing power parity forecasted exchange rates and then calculating the NPV at the dollar cost of capital. c. Are the two dollar NPVs different or the same? multiple choice Different Same d. What is the NPV in dollars if the actual pattern of ZAR/USD exchange…