Slidell Co . ( a U . S . firm ) considers a foreign project in which
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Question:
Slidell Coa US firm considers a foreign project in which it expects to receive million euros at the end of this year. It plans to hedge receivables of million euros with a forward contract. Today, the spot rate of the euro is $ the oneyear forward rate of the euro is presently $ and the expected spot rate of the euro in one year is $ The initial outlay is $ million. Slidell has a required return of percent.
There is a percent chance that political problems will cause a reduction in foreign business, such that Slidell would only receive million euros at the end of one year. Determine the expected value of the net present value of this project. Do not round intermediate calculations. Round your answer to the nearest dollar.
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