You Are Considering a Project in Poland Which Has an Initial

question 70

Multiple Choice

You are considering a project in Poland which has an initial cost of 250,000PLN. The project is expected to return a one-time payment of 400,000PLN 5 years from now. The risk-free rate of return is 3 percent in the U.S. and 4 percent in Poland. The inflation rate is 2 percent in the U.S. and 5 percent in Poland. Currently,you can buy 375PLN for 100USD. How much will the payment 5 years from now be worth in U.S. dollars?

• A) $101,490
• B) $142,060
• C) $1,462,350
• D) $1,489,025
• E) $1,576,515

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