Beruflich Dokumente
Kultur Dokumente
1
1 1 r t
EAR 1
1
1 1 r t
PV of annuity C
1 r
1 r t 1
FV of annuity C
1 g
1
1 r t
PV of growing annuity C1
rg
1 r
Lecture 4
currency
required rate of return, then
Economic theory suggests that the value
of a
converting
the resulting foreign currency
project is the net present value of future
cash
present value into the home currency present
flows back to the investor.
value using the current (spot) exchange rate.
A three-stage approach can be employed for
Interest rate parity theory
project evaluations: