A Canadian Project Has an Initial Cost of Can$1

A Canadian project has an initial cost of Can$1.8 million and is expected to produce cash inflows of Can$710,000 a year for 3 years after which time it will be worthless.Assume the expected inflation rate in Canada is 4 percent while it is only 3 percent in the U.S.The applicable interest rate in Canada is 8 percent.Assume the current spot rate is C$1 = $.78.What is the net present value of this project in Canadian dollars using the foreign currency approach?

A) Can$33,974.02
B) Can$32,790.05
C) Can$29,738.86
D) Can$28,721.40
E) Can$30,751.18