Home / Expert Answers / Finance / you-have-an-investment-opportunity-in-japan-it-requires-an-investment-of-1-01-million-today-and-wi-pa827

(Solved): You have an investment opportunity in Japan. It requires an investment of $1.01 million today and wi ...



You have an investment opportunity in Japan. It requires an investment of $1.01 million today and will produce a cash flow of ¥112 million in one year with no risk. Suppose the risk- free interest rate in the United States is 4.7%, the risk-free interest rate in Japan is 1.6 %1.6%, and the current competitive exchange rate is yen ¥110per dollar. What is the NPV of this investment? Is it a good opportunity?

student submitted image, transcription available below
You have an investment opportunity in Japan. It requires an investment of million today and will produce a cash flow of million in one year with no risk. Suppose the risk free interest rate in the United States is ,the risk-free interest rate in Japan is 1.6 ,and the current competitive exchange rate is yen per dollar. What is the NPV of this investment? Is it a good opportunity?


We have an Answer from Expert

View Expert Answer

Expert Answer



Calculation of the Present Value of Cash inflow in yen
We have an Answer from Expert

Buy This Answer $5

Place Order

We Provide Services Across The Globe