Current competitive exchange rate

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Reference no: EM131318870

You have an investment opportunity in Japan. It requires an investment of $0.92 million today and will produce a cash flow of ¥102 million in one year with no risk. Suppose the risk-free interest rate in the United States is 3.6%, therisk-free interest rate in Japan is 2.6 % and the current competitive exchange rate is ¥110 per dollar. What is the NPV of this investment? Is it a good opportunity?

Reference no: EM131318870

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