Use the CFFA amount from part A is 31,000 Euro. Suppose, Dell, a U.S.-based international company, is
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Use the CFFA amount from part A is 31,000 Euro. Suppose, Dell, a U.S.-based international company, is implementing this project in Germany. Dell’s required rate of return is 10%, and its home currency is USD. The risk-free rate in the United States is 5 per cent, and the risk-free rate in Germany is 7 per cent. Currently, the Euro and USD have an exchange rate of €1/$2. The inflation rate in the United States is 8%, and the inflation rate in the UK is 6%. Based on NPV criteria, should this project be accepted? Show the detailed calculation process.
Related Book For
Investment Analysis and Portfolio Management
ISBN: 978-0538482387
10th Edition
Authors: Frank K. Reilly, Keith C. Brown
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