What is the net present value of this project

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Question - Pleasant Corp. has a unique opportunity to invest in a two-year project in Australia. The project is expected to generate 1,000,000 Australian dollars (A$) in the first year and 2,000,000 Australian dollars in the second. Pleasant Corp. would have to invest $1,500,000 in the project. Pleasant has determined that the cost of capital for similar projects is 14%. What is the net present value of this project if the spot rate of the Australian dollar for the two years is forecasted to be $.55 and $.60, respectively? Show work and briefly discuss results.

Reference no: EM133027962

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