You Want to Invest in a Project in Canada

question 71

Multiple Choice

You want to invest in a project in Canada.The project has an initial cost of C$1.2 million and is expected to produce cash inflows of C$600,000 a year for 3 years.The project will be worthless
After the first 3 years.The expected inflation rate in Canada is 4 percent while it is only 3 percent in
The U.S.The applicable interest rate in Canada is 8 percent.The current spot rate is C$1 = $.69.
What is the net present value of this project in Canadian dollars using the foreign currency
Approach?

• A)C$335,974
• B)C$342,795
• C)C$346,258
• D)C$349,721
• E)C$356,750

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A personality trait characterized by a duplicitous interpersonal style, a cynical disregard for morality, and a focus on self-interest and personal gain.

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