Zeda Inc., a U.S. MNC, is considering making a fixed direct investment in Denmark. The Danish government has offered Zeda a concessionary loan of DKK 14,400,000 at a rate of 4 percent per annum. The normal borrowing rate for Zeda is 6 percent in dollars and 5.5 percent in Danish krone. The load schedule calls for the principal to be repaid in three equal annual installments. The current spot rate is DKK5.60/$1.00 and the expected inflation rate is 3 percent in the United States and 2.5 percent in Denmark. What is the present value of the benefit of the concessionary loan?

Boeing just signed a contract to sell a Boeing 737 aircraft to Air France. Air France will be billed €20.18 million payable in one year. The current spot exchange rate is $1.11 per euro and the one-year forward rate is $1.16 per euro. The annual interest rate is 12 percent in the United States and 11 percent in France. Boeing is concerned with the volatile exchange rate between the dollar and the euro and would like to hedge exchange exposure. Required: a. It is considering two hedging alternatives: sell the euro proceeds from the sale forward or borrow euros from Crédit Lyonnaise against the euro receivable. Which alternative would you recommend? b. Other things being equal, at what forward exchange rate would Boeing be indifferent between the two hedging methods? Complete this question by entering your answers in the tabs below. Required A Required B It is considering two hedging alternatives: sell the euro proceeds from the sale forward or borrow euros from Crédit Lyonnaise against…

Required: Zeda Incorporated, a U.S. MNC, is considering making a fixed direct investment in Denmark. The Danish government has offered Zeda a concessionary loan of DKK14,600,000 at a rate of 4 percent per annum. The normal borrowing rate is 6 percent in dollars and 5.5 percent in Danish krone. The loan schedule calls for the principal to be repaid in three equal annual installments. What is the present value of the benefit of the concessionary loan? The current spot rate is DKK 5.60 per $1.00 and the expected inflation rate is 3 percent in the United States and 2.5 percent in Denmark. Note: Round the exchange rates to two decimal places. Round the intermediate calculations and final answer to nearest whole number. Present value of the benefit of the concessionary loan

Lakonishok equipment has an investment opportunity in Europe. The project cost 14,750,000 in europe currency and is expected to produce cash flows of euro 3,350,000 in year 1, euro 4,350,000 in year 2, and euro 4,750,000 in year 3. The current spot exchange rate is $ .83 in euros and the current risk free rate in the united states is 3 percent, compared to that in euroland of 2.2 percent. The appropriate discount rate for the project is estimated to be 10 percent, the U.S. cost of capital for the company. In addition, the subsidiary can be sold at the end of three years for an estimated 9,250,000 in euros. What is the NPV of the project in U.S dollars? Do not round intermediate calculations and enter your answers in dollars , not in million of dollars , rounded to 2 decimal places e.g. 1,234,567,.89.