You Have an Investment Opportunity in Germany That Requires an Investment

Multiple Choice

You have an investment opportunity in Germany that requires an investment of $250,000 today and will produce a cash flow of €208,650 in one year with no risk.Suppose the risk-free rate of interest in Germany is 7% and the current competitive exchange rate is €0.78 to $1.00.What is the net present value (NPV) of this project? Would you take the project?

A) NPV = 0; No
B) NPV = $2358; No
C) NPV = $2358; Yes
D) NPV = $13,650; Yes
E) NPV = $36,225; Yes