Problem 11 Intro Chicago Construction is considering a project in Canada. The project would require an...

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Problem 11 Intro Chicago Construction is considering a project in Canada. The project would require an initial investment of C$50 million, and pay out C$100 million after taxes in 7 years. The project has a cost of capital of 13%. The annual interest rate over 7 years is 5% in the U.S. and 7% in Canada. The current exchange rate is $0.84 per Canadian dollar. Part 1 Attempt 3/10 for 7.8 pts. What is the NPV of the project if the company uses the current spot rate as the forecast for the spot rate in 7 years (in $ million)? 1+ decimals Submit Part 2 Attempt 1/10 for 10 pts. What is the 7-year forward rate if interest rate parity holds (in $ per C$)? 2+ decimals Submit Part 3 Attempt 1/10 for 10 pts. What is the NPV of the project if the company uses the forward rate to hedge (in $ million)? 1+ decimals Submit Problem 11 Intro Chicago Construction is considering a project in Canada. The project would require an initial investment of C$50 million, and pay out C$100 million after taxes in 7 years. The project has a cost of capital of 13%. The annual interest rate over 7 years is 5% in the U.S. and 7% in Canada. The current exchange rate is $0.84 per Canadian dollar. Part 1 Attempt 3/10 for 7.8 pts. What is the NPV of the project if the company uses the current spot rate as the forecast for the spot rate in 7 years (in $ million)? 1+ decimals Submit Part 2 Attempt 1/10 for 10 pts. What is the 7-year forward rate if interest rate parity holds (in $ per C$)? 2+ decimals Submit Part 3 Attempt 1/10 for 10 pts. What is the NPV of the project if the company uses the forward rate to hedge (in $ million)? 1+ decimals Submit