Asked by
Kaitlyn Drake
on Dec 09, 2024
Verified
You are considering a project in Poland which has an initial cost of 375,000PLN. The project is expected to return a one-time payment of 500,000PLN 4 years from now. The risk-free rate of return is 4 % in Canada and 4.5 % in Poland. Currently, you can buy 323PLN for $100. How much will the payment 4 years from now be worth in Canadian dollars?
A) $148,613
B) $151,741
C) $153,262
D) $154,799
E) $160,074
Risk-Free Rate
The theoretical rate of return on an investment with zero risk, typically represented by government bonds.
Initial Cost
The upfront expenditure involved in acquiring an asset, starting a project, or pursuing an investment.
Canadian Dollars
The official currency of Canada, represented by the symbol CAD.
- Measure the net present value (NPV) of global ventures in a range of currencies.
Verified Answer
BB
Learning Objectives
- Measure the net present value (NPV) of global ventures in a range of currencies.