"> (Answered) Answer given please explain Initial cost= - 1,000 Euros CF in each of the following 3 years= + 10,000 Euros Euro interest rate= 5 percent , Pound - Tutorials Prime

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(Answered) Answer given please explain Initial cost= - 1,000 Euros CF in each of the following 3 years= + 10,000 Euros Euro interest rate= 5 percent , Pound


Answer given please explain Initial cost= - 1,000 Euros CF in each of the following 3 years= + 10,000 Euros Euro interest rate= 5 percent , Pound


Answer given please explainInitial cost= - 1,000 EurosCF in each of the following 3 years= + 10,000 EurosEuro interest rate= 5 percent , Pound interest rate= 7 percent, Spot Pound to Euro exchange rate at time 0= Pound 2/ Euro1. Suppose that beginning in year 1, there is a 10 percent chance each year the host government will seize the project’s assets. If the assets are not seized, you expect to receive the cash flows as stated above. If the assets are seized in a particular year, you expect to receive no repatriated funds thereafter. Assume the international parity conditions hold. What is V£?*     a.  £42,431.492. Assume 50 percent of the project’s expected cash flows are retained in the host country until the project is three years old. The opportunity cost of these funds is i€ = 5 percent, but these blocked funds earn no interest. What is the NPV of the opportunity cost from these blocked funds? *     d.  €658.68

 


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