Question: Amazon.com, Inc., a U.S. MNC, is considering making a fixed direct investment in Greece. The Greek government has offered Amazon an interest free loan of

Amazon.com, Inc., a U.S. MNC, is considering making a fixed direct investment in Greece. The Greek government has offered Amazon an interest free loan of 100,000, to be repaid at the end of third year. The normal borrowing rate is 6 percent in dollars and 5.5 percent in euro. The current spot rate is 60.714/$ and the expected inflation rate is 3% in the U.S. and 2% in Grece. The dollar present value of concessionary loan payment is: 5151.049 5176,087 $121,087 $117.547 $98.765

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