You Have Estimated the Cash Flows in Pesos from a Project

question 68

Multiple Choice

You have estimated the cash flows in pesos from a project in Switzerland and also the dollar-based cost of capital for the project.To compute the project NPV in dollars,you now need to compute the:

• A) current spot rate only.
• B) opportunity cost of capital measured in terms of the foreign currency.
• C) implied forward exchange rate for each year in which the project has cash flows.
• D) actual spot rates for each year in which the project has cash flows.

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