- The project requires a 150,000 peso investment today and is expected to generate cash flows of 61,500 pesos at the end of the next three years.
- The current U.S. exchange rate with the Mexican peso is 10.946 pesos per U.S. dollar, and the exchange rate is expected to remain constant.
- The firm's cost of capital is 8.5%, and the project is of average risk.
What is the dollar-denominated net present value (NPV) of this project? (Note: Do not round your intermediate calculations.)
a. $775.34
b. $646.12
c. $581.51
d. $710.73