You have an investment opportunity in Japan. It requires an investment of ($0.98) million today and will
Question:
You have an investment opportunity in Japan. It requires an investment of \($0.98\) million today and will produce a cash flow of ¥107 million in one year with no risk. Suppose the risk-free interest rate in the United States is 3.9%, the risk-free interest rate in Japan is 2.3%, and the current competitive exchange rate is ¥110 per \($1.\) What is the NPV of this investment? Is it a good opportunity?
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