Q.

A foreign project generates a negative cash flow in year 1 and positive cash flows in years 2 through 5. The NPV for this project will be higher if the foreign currency _________ in year 1 and _________ in years 2 though 5.

A. depreciates; depreciates
B. appreciates; appreciates
C. depreciates; appreciates
D. appreciates; depreciates
Answer» C. depreciates; appreciates
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