Apple Inc is planning to set up a project in Japan with an expected life of 5 ye

Question

Apple Inc is planning to set up a project in Japan with an expected life of 5 years. The project is expected to generate a cash flows of Yen 2 million, 2.5 million, 3 million, 3.25 million and 3.5 million over the next five years. The project requires an initial investment of Yen 8 million. The current spot rate of $ and Yen is $1=Yen 105. $ is expected to depreciate by 1.25% per year over the next 5 years against Yen.

What is the IRR of this project in $ terms?
Answer
13.07%
19.09%
12.25%
22.10%

Explanation / Answer

b.$21.72 million

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