You are analyzing a project with an initial cost of $\le$45,000. The project is expected to return $\le$8,000 the first year, $\le$22,000 the second year and $\le$20,000 the third and final year. The current spot rate is $\le$.57. The nominal risk-free return is 5.5 % in the U.K. and 4.5 % in Canada. The return relevant to the project is 9 % in the U.K. and 10.5 % in Canada. Assume that uncovered interest rate parity exists. What is the net present value of this project in Canadian dollars?

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The Answer of You are analyzing a project with an initial cost of $\le$45,000. The project is expected to return $\le$8,000 the first year, $\le$22,000 the second year and $\le$20,000 the third and final year. The current spot rate is $\le$.57. The nominal risk-free return is 5.5 % in the U.K. and 4.5 % in Canada. The return relevant to the project is 9 % in the U.K. and 10.5 % in Canada. Assume that uncovered interest rate parity exists. What is the net present value of this project in Canadian dollars?

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