Eugowra Mining company is evaluating an investment in India that produces an expected cash inflow of 2.07 million Rupee in year 4. The Indian investment will cost 760,000 Indian rupee. The current exchange rate is AUD/INR = 51.87. The risk free interest rate in India is 4.41% p.a. and in Australia is 2.52%. Based on interest rate parity calculate the expected spot rate (AUD/INR) for year four.

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Using Interest Rate Parity IRP to Calculate Expected Spot Rate Given the information Cash inflow in ... View the full answer