Romanus Company, a U.K. MNC, is contemplating making a foreign capital expenditure in South Korea. The initial cost of

[answerhappygod]

Romanus Company, a U.K. MNC, is contemplating making a foreign
capital expenditure in South Korea. The initial cost of the
project is KRW 22,000. The annual cash flows over the seven
year economic life of the project in KRW are estimated to be:
4,000; 5,000; 6,000; 7000; 8,000; 9,000; and, 10,200. The
parent firm’s cost of capital in pounds is 7.5%. Long-run
inflation is forecasted to be 3.5% per annum in the U.K. and 7.5%
in South Korea. The current spot foreign exchange rate is
KRW/GBP = 3.75.
What is the NPV in GBP if the actual pattern of KRW/GBP exchange
rates are: S(0) = 3.75, S(1) = 5.7, S(2) = 6.7, S(3) = 7.2,
S(4) = 7.7; S(5) = 8.2; S(6) = 9.2; S(5) = 10.2 .