A project in South Korea requires an initial investment of 1 billion South Korean won. The project
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Question:
A project in South Korea requires an initial investment of billion South Korean won. The project is expected to generate net cash flows to the subsidiary of billion and billion won in the two years of operation, respectively. The project has no salvage value. The current value of the won is won per US dollar, and the value of the won is expected to remain constant over the next two years.
What is the NPV of this project if the required rate of return is percent? Do not round intermediate calculations. Round your answer to the nearest dollar.
$
Repeat the question, except assume that the value of the won is expected to be won per US dollar after two years. Further assume that the funds are blocked and that the parent company will only be able to remit them back to the United States in two years. How does this affect the NPV of the project? Do not round intermediate calculations. Round your answers to the nearest dollar. Enter your answers as the positive numbers.
New NPV: $
A situation where the funds are blocked and the won is expected to depreciate
Select
the NPV by $
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