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

question 16

Multiple Choice

A Canadian firm is planning to make an investment in Japan.The firm estimates that the project will generate a single cash flow of 10 million JPY after one year.If the one year forward exchange rate is 105 JPY/CAD,and the Canadian cost of capital is 7.5%,what is the PV of the project cash flow?

• A)$112,994
• B)$94,351
• C)$102,381
• D)$88,594
• E)$95,238

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Definitions:

Denial

A defense mechanism where an individual refuses to accept reality or facts, thus avoiding dealing with painful feelings or events.

Sublimation

A defense mechanism in which socially unacceptable impulses or idealizations are transformed into socially acceptable actions or behavior.

Fight-or-flight Response

A physiological reaction to perceived harmful events, attacks, or threats to survival, initiating a state of heightened readiness for physical action.

Adrenal Glands

Small, triangular glands located on top of both kidneys that produce hormones that help regulate metabolism, immune system, blood pressure, response to stress, and other essential functions.