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(a) Green Group reviews an invest opportunity in Australia. This is a two-year project and is expected to generate A$ 1,000,000 in the first year and A$ 2,000,000 in the second year. The group would have to invest US$ 1,500,000 in the project. The project’s cost of capital is 14% which is the same as the similar projects for Green Group. What is the net present value (NPV) of this project if the spot rate of the Australian dollar for the two years is forecasted to be $0.55 and $0.60, respectively?
(b) Green Group needs funding to finance the project in Australia. Comparing with other long-term financing means, the foreign currency bonds usually have lower yields. To determine the financing cost of the bond, suggest and describe any appropriate procedures.
Julio and Isabel run a small import-export firm in Laredo. Explain how different goals for their lives and careers affect their exit strategy.
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Dave and Marlene Carter live in the Boston area, where Dave has a successful orthodontics practice. Dave and Marlene have built up a sizable investment portfolio and have always had a major portion of their investments in fixed-income securities. Wha..
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What is the difference between "Life Annuities with Period Certain" and "Fixed Period Payment"?
Binomial Tree Farm’s financing includes $6.7 million of bank loans. Its common equity is shown in Binomial’s Annual Report at $6.84 million. It has 500,000 shares of common stock outstanding, which trade on the Wichita Stock Exchange at $16.3 per sha..
How would you build a well-diversified portfolio? How many individual investments does it take?
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