Question: A financial manager has determined that the appropriate discount rate for a foreign project is 16 percent. However, that discount rate applies in the United
A financial manager has determined that the appropriate discount rate for a foreign project is 16 percent. However, that discount rate applies in the United States using dollars. What discount rate should the manager use in the foreign country using the foreign currency? The inflation rate in the United States and in the foreign country is expected to be 5 percent and 4 percent, respectively.
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