The forward rate is 124 if the mnc has a required rate of


A U.S.-based MNC is considering a project in Europe. This is a one-year project, which is expected to produce 10 million euros at the end of one year. The initial investment will be USD $9 million.

The firm decides to hedge this future inflow with a forward contract. The forward rate is $1.24. If the MNC has a required rate of return of 18%, what is the NPV of the project? Please show work.

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Financial Management: The forward rate is 124 if the mnc has a required rate of
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