Use the folllowing the answer the next two questions. XYZ corporation (US firm) is evaluating a project with the following expected cash flows and discount rate(K):
|
Year 0
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
|
|
K= .10
|
K=.12
|
K=.15
|
K=.18
|
|
Dollars
|
-500,000
|
500,000
|
50,000
|
500,000
|
250,000
|
|
Yen
|
-1,000,000
|
2,500,000
|
500,000
|
500,000
|
-700,000
|
|
Pounds
|
-100,000
|
60,000
|
-10,000
|
-100,000
|
-200,000
|
Exchange rates over this four year period are as follows:
|
Exchange Rate
|
Year 0
|
Year 1
|
Year 2
|
Year 3
|
Year 4
|
|
Yen
|
.005USD/JY
|
.002USD/JY
|
.005USD/JY
|
.005USD/JY
|
.008USD/JY
|
|
Pounds
|
2.2 USD/BP
|
2 USD/BP
|
2.7 USD/BP
|
2.5 USD/BP
|
2.2 USD/BP
|
Find the initial outlay (year 0 cost) in dollars for the project. Round intermediate steps and your final answer to four decimals. Do not use the dollar sign when entering your answer.