You are considering a project in Norway with an initial cost of NKr135,000. The project is expected to return a one-time payment of NKr200,000 at the end of Year 5. The risk-free rate of return is 2.6 percent in the U. S. and 3.1 percent in Norway. The inflation rate is 1.6 percent in the U. S. and 2.3 percent in Norway. Currently, the exchange rate is $1 = NKr7.0305. Approximately how much will the payment at the end of 5 Years be worth in U. S. dollars?
a. $27,747
b. $28,108
c. $27,472
d. $28,311
e. $27,006
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