You Want to Invest in a Riskless Project in Sweden

You want to invest in a riskless project in Sweden. The project has an initial cost of SKr2.1 million and is expected to produce cash inflows of SKr810,000 a year for 3 years. The project will be
Worthless after the first 3 years. The expected inflation rate in Sweden is 2 percent while it is 5
Percent in Canada. A risk-free security is paying 6 percent in Canada. The current spot rate is $1 =
SKr7.55. What is the net present value of this project in Swedish krona using the foreign currency
Approach? Assume that the international Fisher effect applies.

A) SKr185,607
B) SKr191,175
C) SKr196,910
D) SKr197,867
E) SKr202,818