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What is the net present value of the project in lalaland

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You want to invest in a project in LaLaLand. The project has an initial cost of LLL768,000 and is expected to produce cash inflows of LLL391,000 a year for 3 years. The project will be worthless after that. The expected inflation rate in LaLaLand is 4% while it is only 2% in the U.S. The applicable interest rate for a project like this in LaLaLand is 13%. The current spot exchange rate is LLL1 = $2.3456.

Problem 1: What is the Net Present Value of this project in LaLaLand's currency (i.e., in "LLL")?

Reference no: EM132772839

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