Business, 07.05.2020 00:13 jaksmmwlqlzm
A Canadian project has an initial cost of Can$1.8 million and is expected to produce cash inflows of Can$710,000 a year for 3 years after which time it will be worthless. The expected inflation rate in Canada is 4 percent while it is only 3 percent in the U. S. The applicable interest rate in Canada is 8 percent. The current spot rate is C$1 = $.88. What is the net present value of this project in Canadian dollars using the foreign currency approach?
a. Can$33,974.02
b. Can$32,790.05
c. Can$29,738.86
d. Can$28,721.40
e. Can$30,751.18
Answers: 2
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A Canadian project has an initial cost of Can$1.8 million and is expected to produce cash inflows of...
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