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Sacramone Products Co. is a U.S.-based firm evaluating a project in Mexico.
You have the following information about the project:
| The project requires a 170,000 peso investment today and is expected to generate cash flows of 64,500 pesos at the end of the next three years. |
| The current U.S. exchange rate with the Mexican peso is 10.946 pesos per U.S. dollar, and the exchange rate is expected to remain constant. |
| The firms WACC is 9.5%, and the project is of average risk. |
What is the dollar-denominated net present value (NPV) of this project?
-$634.87
-$784.26
-$746.91
-$672.22
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