Payment five years from now be worth in us dollars

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1. You are considering a project in India which has an initial cost of 1,050,000RS. The project is expected to return a one-time payment of 1,970,000RS five years from now. The risk-free rate of return is 2 percent in the U.S. and 4.5 percent in India. The inflation rate is 1.7 percent in the U.S. and 4 percent in India. Currently, you can buy 5,200RS for $100. How much will the payment five years from now be worth in U.S. dollars?

$27,380

$29,006

$31,579

$33,484

$35,412

2. A coupon bond has a yield to maturity of 12%, a face value of $10,000, a coupon rate of 10% and time to maturity of 2 years. What is the price of the bond?

Reference no: EM132014811

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