Market forces determine the equilibrium exchange rate

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Reference no: EM131616450

1. You buy a new piece of equipment for $27,729, and you receive a cash inflow of $4,400 per year for 14 years. Use Appendix D for an approximate answer but calculate your final answer using the financial calculator method. What is the internal rate of return?

Internal rate of return___________%

2. In a flexible exchange rate system, market forces determine the equilibrium exchange rate. So, what does it mean when we say a currency is overvalued?

Reference no: EM131616450

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