You want to invest in a project in Wonderland. The project has an initial cost of W774,000.
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Question:
You want to invest in a project in Wonderland.
- The project has an initial cost of W774,000.
- It is expected to produce cash inflows of W381,000 a year for 5 years.
- The project will be worthless after that.
- The expected inflation rate in Wonderland is 2% while it is 4% in the U.S.
- The applicable interest rate for a project like this in Wonderland is 14%.
- The current spot exchange rate is W1.0000 = $5.4321.
What is the Net Present Value of this project in Wonderland's currency (i.e., in "W")?
Increase decimal places for any intermediate calculations, from the default 2 to 6 or higher, and only round your final answer to TWO decimal places: for example, 10,000.23.
Do NOT use "currency units" in your answer.
HINT: You won't need to use all the numbers that are given!
Related Book For
Fundamentals of Financial Management
ISBN: 978-1337395250
15th edition
Authors: Eugene F. Brigham, Joel F. Houston
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