What is the net present value of project

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Reference no: EM132005678

Potter Company has a unique opportunity to invest in a two-year project in Australia. The project is expected to generate 1,100,000 Australian dollars (A$) in the first year and 2,500,000 Australian dollars in the second. Potter would have to invest $2,000,000 in the project. Potter has determined that the cost of capital for similar projects is 14%. What is the net present value of this project if the spot rate of the Australian dollar for the two years is forecasted to be $.55 and $.60, respectively?

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Reference no: EM132005678

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