Question: QUESTION 7 The current exchange rate is $1.60 - 1.00. The inflation rate in the U.S. is 6 percent and the inflation rate in the

QUESTION 7 The current exchange rate is $1.60 - 1.00. The inflation rate in the U.S. is 6 percent and the inflation rate in the euro zone 2 percent. The appropriate cost of capital for a U.S.-based firm to evaluate a domestic project is 8 percent What is the euro-zone cost of capital for this project? Please type your answer as a decimal (four decimal places), for example 3.21% would be entered as 0.0321 [NOT

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