Consider the following international investment opportunity: The current exchange rate is $1.60 = €1.00.The inflation rate in the U.S.is 3 percent and in the euro zone 2 percent.The appropriate cost of capital to a U.S.-based firm for a domestic project of this risk is 8 percent.
Find the dollar cash flows to compute the dollar-denominated NPV of this project.

Question

Consider the following international investment opportunity:  The current exchange rate is $1.60 = €1.00.The inflation rate in the U.S.is 3 percent and in the euro zone 2 percent.The appropriate cost of capital to a U.S.-based firm for a domestic project of this risk is 8 percent.
Find the dollar cash flows to compute the dollar-denominated NPV of this project.

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The Answer of Consider the following international investment opportunity:  The current exchange rate is $1.60 = €1.00.The inflation rate in the U.S.is 3 percent and in the euro zone 2 percent.The appropriate cost of capital to a U.S.-based firm for a domestic project of this risk is 8 percent.
Find the dollar cash flows to compute the dollar-denominated NPV of this project.

Consider the Following International Investment Opportunity: the Current Exchange