Consider this case: Sacrament Products Co. is a U.S. firm evaluating a project in Australia. You have the following information about the project: The project requires an investment of AU$987,000 today and is expected to generate cash flows of AU$900,000 at the end of each of the next two years. The current exchange rate of the U.S. dollar against the Australian dollar is $0.7811 per Australian dollar (AU$). The one-year forward exchange rate is $0.8096/AU$, and the two-year forward exchange rate is $0.8344/AU$. The firm's weighted average cost of capital (WACC) is 10%, and the project is of average risk. 

What is the dollar-denominated net present value (NPV) of this project? 

 

 

 

Answer rating: 100% (QA)

To calculate the dollardenominated net present value NPV of the project we need to conver... View the full answer