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Business, 04.06.2020 19:08 samueltaye

You want to invest in a riskless project in Sweden. The project has an initial cost of SKr3.86 million and is expected to produce cash inflows of SKr1.76 million a year for three years. The project will be worthless after three years. The expected inflation rate in Sweden is 3.2 percent while it is 2.8 percent in the U. S. A risk-free security is paying 4.1 percent in the U. S. The current spot rate is $1 = SKr7.7274. Required:

1. What is the net present value of this project in Swedish krona if the International Fisher effect applies?

O SKr1,087,561

O SKr958,029

O SKr701,458

O SKr823,333

O SKr978,177

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Answers: 3

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You want to invest in a riskless project in Sweden. The project has an initial cost of SKr3.86 milli...

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