Calculate the npv in u.s. dollars

Assignment Help Finance Basics
Reference no: EM13267136

An American firm is evaluating an investment in Mexico. The project will require purchasing equipment from a variety of sources and shipping it to Mexico. The projected cost of buying the equipment and shipping it is $5.7 million. Once the project begins operations, it is expected to last for 5 years (assume straight line depreciation). Expected sales are $2,900,000 each year in the U.S. and the costs of the project are projected to be 8 million pesos each year for the 5 years. If taxes are 35%, the appropriate discount rate is 9% and you use the current exchange rate for pesos:

(a) Calculate the NPV in U.S. dollars. (Show all calculations and ignore working capital)

(b) Calculate the NPV in Mexican pesos. (Show all calculations and ignore working capital)

 

Reference no: EM13267136

Questions Cloud

Compute the calorie content of 75g of candy : A 15-g sample of the candy is placed in a small aluminum container of mass 0.325 kg filled with oxygen, compute the Calorie content of 75g of candy
Find how many more revolutions of the pedals mountain biker : Typical gearing for most bicycles ranges from 30 to 50 teeth on the chain wheel and 12 to 30 teeth on the rear cog. Find how many more revolutions of the pedals the mountain biker will make during 480 miles trip using average pedaling time
What is the overall rate of return on the portfolio : Using current exchange rates, what is today's value of the investor's portfolio in U.S. dollars if the UK investment decreased 5% (in local currency) and the Japan investment increased 1% (in local currency)?
Write a research paper on autonomic computing : Write a research paper (excluding the cover page and reference page) on the real world application of the chosen technology
Calculate the npv in u.s. dollars : Calculate the NPV in U.S. dollars. (Show all calculations and ignore working capital)
What is the mechanical energy of the block : A 2.5-kg block is attached to a spring with k=100 N/m and compress it with a distance of 0.40 m. What is the mechanical energy of the block
Compute the amount of carbon in a 100kg person : If you wanted to know how much carbon there is in a 100kg person, what information would you need? Try to calculate the amount of carbon in a 100kg person.
What are the possible power levels pi at the outputs : Suppose the above device is to be used as an 8-way power splitter (let's say only the top-most input is used). Let the input power be P. Assuming a cross-coupling coefficient of f and ignoring excess losses, what are the possible power levels Pi a..
What is the yield to maturity : Various calculated Bond Yields are listed as Answer along with name of each type of yield as questions. Your task is to match the appropriate Answer with Question.

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the 2011 cash flow to stockholders

If net fixed assets increased by $22,000 during the year, what was the addition to NWC?

  How might a company make strategic use of countertrade

How might a company make strategic use of countertrade schemes as marketing weapons to generate export sales revenues? What are the risks associated with pursuing such a strategy?

  Decisions to maximize stockholders welfare

Suppose you are the president of a large publicly owned company, would you make decisions to maximize stockholders' welfare or your own personal interest?

  Funding the retirement

How large fund will you need when you retire in 20 years to give the 30-year, $20,000 retirement annuity? What effect would increase in the rate you can earn both throughout and prior to retirement have on the values found in parts a and b? Discuss..

  Find what is this offer worth to you today

Find what is this offer worth to you today at a discount rate of 8% - npv or CF function or timeline

  Explain fully the reasons for your choice

Could this be balance sheet for St. Ann's Credit Union or Bank of America. Explain fully the reasons for your choice.

  Calculation of effective interest rate for a bond

Calculation of effective interest rate for a bond and the bonds pay interest semiannually each June 30th and December 31st and mature on December 31, 2018

  Calculate necessary funds

Suppose your younger sister will start college in next 5-years. She has just informed your parents that she wants to go to Harvard University, which will cost $18,000 each year for four years.

  Compute the break-even point in boxes

Jack and Joe, Corporation, sells fine chocolates at $15 a box. The fixed costs of this operation are $80,000, while the variable cost each box is $10.

  How much interest must xyz corporation pay

The rate is prime plus 2 percent. The prime rate was 8.5 percent at the beginning of the loan and changed to 9 percent after two months. This was the only change. How much interest must XYZ corporation pay?

  Compute current market value of the bonds

The Company has 1,000,000 of 8 percent bonds outstanding. Interest is payable each July and January 1 and the maturity date is ten years from today.

  Computation of bonds current yield and yield to maturity

Computation of bonds Current yield and yield to maturity and How much should you be willing to pay for Bond X today

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd