Country Risk and Project NPV Atro Co. (a U.S. firm) considers a foreign project in which it expects to receive 10 million euros at the end of one year. Although it realizes that its receivables are uncertain, it decides to hedge receivables of 10 million euros with a for ward contract today. As of today, the spot rate of the euro is $1.20, the one-year forward rate of the euro is $1.24, and the expected spot rate of the euro in one year is $1.19. The initial outlay of this project is $7 million. Atro has a required return of 18 percent.
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