Question: Starbucks in Croatia. Starbucks opened its first store in Zagreb, Croatia in October 2010. In Zagreb, the price of a tall vanilla latte is 25.70kn. In New York City, the price of a tall vanilla latte is $2.65. The exchange rate between Croatian kunas (kn) and U.S. dollars is kn5.6288/$. According to purchasing power parity, is the Croatian kuna overvalued or undervalued?