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dybincka [34]
3 years ago
7

You are considering a project in Norway with an initial cost of NKr135,000. The project is expected to return a one-time payment

of NKr200,000 at the end of Year 5. The risk-free rate of return is 2.6 percent in the U.S. and 3.1 percent in Norway. The inflation rate is 1.6 percent in the U.S. and 2.3 percent in Norway. Currently, the exchange rate is $1= NKr7.0305. Approximately how much will the payment at the end of 5 Years be worth in U.S. dollars?
a. $27,747
b. $28,108
c. $27,472
d. $28,311
e. $27,006
Business
1 answer:
MA_775_DIABLO [31]3 years ago
8 0

Answer:

The payment will be approximately at the end of 5 Years of $27,764.28, so option a is the correct one

Explanation:

In order to calcualte The exchange rate at the end of five years is we have to use the following formula:

= 7.0305 * {(1+ interest rate in Norway)/(Interest rate in US)}^5

= 7.0305 * [(1.031)/(1.026)]^5

= Nkr 7.2035 / $

= $1/7.2035 / Nkr

= $0.1388 / Nkr

Henche, The payment to be recieved at the end of 5 years will be NKr 200,000, therefore the value of the payment in dollars is = $27,764.28

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A bank has $8,000 in deposits and $6,000 in loans. It has loaned out all it can given the reserve requirement. It follows that t
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c. 25 percent.

Explanation:

The computation of the reserve requirement percentage is shown below:

Given that

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3 years ago
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hope it helps.

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2 years ago
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(1.1: Modeling) Before paying employee bonuses and state and federal taxes, a company earns profits of $103,000. The company pay
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Answer:

Amount paid in;

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