Question 1 0/1 pts You can currently buy 147 yen for one US dollar. For the...

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Question 1 0/1 pts You can currently buy 147 yen for one US dollar. For the foreseeable future, the US dollar will gain 6.5%

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Answer 1

Answer #1

Hello Sir/ Mam

YOUR REQUIRED ANSWER IS NPV = $297,918.75

Evaluating the given cashflows:

Time	Cashflows in Yen	Exchange Rate	Cashflows in USD
0	-$27,000,000.00	$147.00	-$183,673.47
1	$44,000,000.00	$155.82	$282,377.10
2	$49,000,000.00	$165.17	$296,665.48

Now, Present Value schedule:

Time	Cashflows in USD	PVF	PV
0	-$183,673.47	1	-$183,673.47
1	$282,377.10	0.884173	$249,670.29
2	$296,665.48	0.781762	$231,921.92
NPV			$297,918.75

I hope this solves your doubt.

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