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What is net present value of project in us dollar for plus

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PLUS is evaluating a project has an initial GBP cost of £75,000 and is expected to generate: £10,000 the first year, £40,000 the second year, and £50,000 the third (third year is the final year). The current spot rate is £0.60 per $ (GBP/USD). The expected inflation rate is 4 percent in the U.K. and 2 percent in the U.S. The US MNC has a required return (cost of capital) of 10%.

Problem 1: What is the Net Present Value of this project in U.S. dollars (show/outline all work for partial credit)?

Reference no: EM132961829

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