A Canadian Firm Is Planning to Make an Investment in Europe.The

question 28

Multiple Choice

A Canadian firm is planning to make an investment in Europe.The firm estimates that the project will generate a single cash flow of 200,000 euros after one year.If the one year forward exchange rate is 1.34 CAD/EUR,and the Canadian cost of capital is 6%,what is the PV of the project cash flow?

• A)$252,830
• B)$158,209
• C)$140,805
• D)$188,679
• E)$268,000

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Definitions:

Expense Of Business

Costs incurred in the operation of a business, including costs of goods sold, overhead, payroll, and other operating expenses.