What is the net present value of project in us dollars

Assignment Help Finance Basics
Reference no: EM132507350

You are analyzing a project with an initial cost of £50,000. The project is expected to return £12,000 the first year, £36,000 the second year, and £40,000 the third and final year. There is no salvage value. Assume the current spot rate is £.6346. The nominal return relevant to the project is 12 percent in the U.S. The nominal risk-free rate in the U.S. is 3.4 percent while it is 4.1 percent in the U.K. Assume that uncovered interest rate parity exists. What is the net present value of this project in U.S. dollars?

Reference no: EM132507350

Questions Cloud

Author perspective with respect to project management : Discuss the author's perspective with respect to project management. what is your opinion of the role of project management within an organization,
Describe conditions for the patient differential diagnosis : A 20-year-old male complains of experiencing intermittent headaches. The headaches diffuse all over the head, but the greatest intensity and pressure occurs.
What would be the approximate wacc : One of the company's recent project bids is accepted. This project relates to construction of a new airport in Berlin and expected cash flows are as follows.
Calculate the equivalent units for july : Assign costs to units transferred out and EWIP using the FIFO method. Calculate the unit cost. (Note: Round to two decimal places.)
What is the net present value of project in us dollars : Assume that uncovered interest rate parity exists. What is the net present value of this project in U.S. dollars?
Christensen video : Discuss your reaction to his comments about the value of being data driven and the value of "looking through the lens of a theory" to determine company's future
Calculate the company waccs based on book : Assume that you have been hired as a consultant by Whole Foods to estimate the firm's weighted average cost of capital. They have provided you the following inf
Make a direct materials budget for april and may and june : Prepare a direct materials budget for April, May, and June. Ramos Co. provides the sales forecast and production budget for the next four months
How would you prioritize your assessments and activities : How would you prioritize your assessments and activities? How would you describe your critical thinking process and how do you organize and prioritize.

Reviews

Write a Review

Finance Basics Questions & Answers

  Types of adjectives in english

There are at least two types of adjectives in English in terms of complement selection. Explain.

  Full disclosure in financial reporting

According to the textbook, the goal of financial reporting is to report financial information that is transparent and complete and truthfully report the financial performance of a company. Investors and other interested parties need to read and un..

  Financial analysis

Use Microsoft Excel to chart the historical prices (like the one below) based on the monthly data.

  What does the debt-equity ratio need to be

The tax rate is 34 percent. What does the debt-equity ratio need to be for the firm to achieve its target WACC?

  Determine the minimum price of the call option

A European call option is written on a stock whose current price S = 80. The exercise price X = 80, the interest rate r = 8%, and the time to option exercise.

  If a result is significant at the 1 level is it also

if a result is significant at the 1 level is it also always signicant at the 5 level? if a result is significant at the

  What is the operating income ebit for both firms what are

firm a has 10000 in assets entirely financed with equity. firm b also has 10000 in assets but these assets are financed

  Estimate average length of firms short term operating cycle

Assume net sales of $1,200,000 and cost of goods sold of $900,000. Determine the average investment in accounts receivable, inventories, and accounts payable. What would be the net financing need considering only these three accounts?

  What is the company net income

Cost of goods sold, administrative and selling expenses, and respectively. What is the company's net income

  Tomorrow in an index fund of the wilshire

If you start making monthly deposits tomorrow in an index fund of the Wilshire 5000 and assume it will return 7% compounded monthly

  What is the return of the investment

Using the facts detailed above, answer the following questions: What is the return of the investment? What is the payback period? If Ford requires ad spend to be paid back in 3 months, do they make this spend

  Desire of investors for current income

Explain why this argument does/does not work in a perfect capital market with no transaction costs. Explain how this argument does/does not work in real life.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd