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QUESTION
You have an investment opportunity in Japan. It requires an investment of $0.91million today and will produce a cash flow often 106million in one...
You have an investment opportunity in Japan. It requires an investment of $0.91million today and will produce a cash flow often ¥106million in one year with no risk. Suppose the risk-free interest rate in the United States is 4.3%, the risk-free interest rate in Japan is 2.9% ,and the current competitive exchange rate is ¥110 per dollar. What is the NPV of this investment? Is it a good opportunity?
What is the NPV of this investment?
