Quantitative Problem: International Machinery Company $($IMC$)$ is a Swedish multinational manufacturing company. Currently, IMC's financial planners are considering

undertaking a $1-$year project in the United States. The project's expected dollar$-$denominated cash flows consist of an initial investment of $$2,150$ and a cash inflow

the following year of $$3,700.$ IMC estimates that its risk$-$adjusted cost of capital is $13\%.$ Currently, $1$ U$.$S$.$ dollar will buy $6\mathrm{.}7$ Swedish kronas. In addition, $1-$year risk$-$

free securities in the United States are yielding $2\%,$ while similar securities in Sweden are yielding $1\%.$

a$.$ If the interest parity holds, what is the forward exchange rate of Swedish krona per U$.$S$.$ dollar? Do not round intermediate calculations. Round your answer to two

decimal places.

Swedish krona per U$.$S$.$ dollar

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Realize that Sweden is the home country in this problem.

Refer to the interest rate parity equation substituting values given to calculate the $1-$year forward rate.

The spot rate in the problem is expressed in terms of the amount of home currency per unit of foreign currency. $($Home currency $=$ Swedish krona$)$

Calculate the value on the right$-$hand side of the equation because both values are known. Now, you can calculate the forward exchange rate in terms of

Swedish krona per U$.$S$.$ dollar.

b$.$ If IMC undertakes the project, what is the net present value and rate of return of the project for IMC in home currency? Do not round intermediate calculations.

Round your answers to two decimal places.

NPV: