Refer to Instruction 17.1. The European expansion would have a greater NPV in dollar terms if the euro appreciated in value over the five-year life of the project and the project had a positive NPV, other things equal.

Question

Quizplus · Accepted Answer

If the euro appreciates in value over the five-year life of the project, the euro-denominated cash flows generated by the project would be worth more in dollar terms. This would increase the NPV of the project in dollar terms, assuming the project has a positive NPV.