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Project expected dollar cash flows

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Reference no: EM131105176

Taiwan Semiconductor (TSM) is considering a 2-year project in the U.S. The project's expected dollar cash flows consist of an initial investment of $100,000 with cash flows of $70,000 in year 1 and $60,000 in year 2. The risk-adjusted cost of capital for the project is 20%. The current exchange rate is NT$30=$1. Risk-free interest rates in the U.S. and Taiwan are:

U.S.

1-year: 4.0%

2-year: 7%

Taiwan:

1-year: 3%

2-year: 5%

What is the NPV of the project?

Note: During the calculations, the rounding of the numbers may impact the final answer. So select the closest answer.

Select one:

a. $12,532.86

b. -$63,166.67

c. -$52,900.77

d. $45,655.09

e. $23,090.74

Reference no: EM131105176

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