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bachelor in business administration
Polytechnic State University Sanluis
Jan-2006 - Nov-2010
CPA
Polytechnic State University
Jan-2012 - Nov-2016
Professor
Harvard Square Academy (HS2)
Mar-2012 - Present
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A project in Hong Kong costs Hong Kong dollar (HKD) 200,000 and produces cash flows of HKD 75,000 per year for five years. Gruner, a Swiss firm using the Swiss franc (CHF), is interested in adopting this project. If this had been a domestic project, the discount rate would have been 11 percent. Forecasts of inflation rates over the next five years indicate inflation of 1.2 percent in Switzerland and 4 percent in Hong Kong. Spot CHFHKD is 8.0.
Making appropriate assumptions and using data given in the problem, estimate CHF cash flows, and calculate the project NPV in CHF.
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