You have an investment opportunity in Japan. It requires an investment of
$0.91
million today and will produce a cash flow of
¥108
million in one year with no risk. Suppose the risk-free interest rate in the United States is
4.7%
, the risk-free interest rate in Japan is
1.5%
, and the current competitive exchange rate is
¥110
per dollar. What is the NPV of this investment? Is it a good opportunity? The NPV of this investment is
$

q,
(Round to the nearest dollar.)

Question

You have an investment opportunity in Japan. It requires an investment of

$0.91

million today and will produce a cash flow of

¥108

million in one year with no risk. Suppose the risk-free interest rate in the United States is

4.7%

, the risk-free interest rate in Japan is

1.5%

, and the current competitive exchange rate is

¥110

per dollar. What is the NPV of this investment? Is it a good opportunity? The NPV of this investment is

$

q,

(Round to the nearest dollar.)

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Solution for - You have an investment opportunity in Japan. It requires an investment of $0.91 million today and wi

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