Test bank chapter 1 IntroductionSolution: Year 1: 12,000,000 euros x |
Download 435.5 Kb.
|
| Solution: Year 1: 12,000,000 euros x $0.60 = $ 7,200,000
Year 2: 30,000,000 euros x $0.60 = $18,000,000 Net present value = $7,200,000/(1.18) + $18,000,000/(1.18)2 - $8,000,000 = $11,029,015. 14. A foreign project has an initial investment of $1,400. Its net cash flows are expected to be $900, $1,000, and $1,400 for each of the next three years. The certainty equivalent coefficients of the project are 0.75, 0.55, and 0.35 for each of the next three years. With a 6-percent riskless rate of return, determine the certain net present value of the project. * A. about $140 B. about $450 C. about $1,500 D. about $2,500 E. about $2,400 Download 435.5 Kb. Share with your friends:
|