Calculation of Net Present Value of a Project-Multiple Choice Question
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Question
You have an investment opportunity in France that requires an investment of $250,000 today and will produce a cash flow of €208,650 in one year with no risk. Suppose the risk-free rate of interest in France is 6% and the current competitive exchange rate is €0.78 to $1.00. What is the NPV of this project? Would you take the project?
A) NPV = 0; No
B) NPV = 2,358; No
C) NPV = 2,358; Yes
D) NPV = 13,650; Yes
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