Question: Problem 2 (30 points): A project in South Korea requires an initial investment of 2 billion South Korean won. The project is expected to generate

Problem 2 (30 points):

A project in South Korea requires an initial investment of 2 billion South Korean won. The project is expected to generate net cash flows to the subsidiary of 3 billion and 4 billion won in the two years of operation, respectively. The project has no salvage value. The current value of the won is 1,100 won per U.S. dollar, and the value of the won is expected to remain constant over the next two years. Then, answer the following questions:

What is the payback period for this project?
What is the internal rate of return for this project?
What is the NPV of this project if the required rate of return is 13 percent? Will you accept to invest in this foreign investment project?

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