Compute after-tax cash flow to the daily planet

Assignment Help Finance Basics

Reference no: EM131793884

Question: The Daily Planet has a wholly owned foreign subsidiary in Brazil. The subsidiary earns 30 million reals per year before taxes in Brazil. The foreign income tax rate is 30%. The subsidiary repatriates the entire after-tax profits in the form of dividends to the Daily Planet. The U.S. corporate tax rate is 40% of foreign earnings before taxes.

a) Compute after-tax cash flow to the Daily Planet from this investment (in reals).

b) If the exchange rate is 56 ($/reals), what is the after-tax cash flow in dollars?

c) Depreciation related cash flow is 2 million reals per year for five years for another Daily Planet investment in Brazil. The exchange rate is expected to be 59 ($/reals). The Daily Planet applies a 15% discount rate to foreign cash flows. What is the present value (in dollars) of the depreciation-related cash flow?

Reference no: EM131793884

Questions Cloud

Determine the unit contribution margin for each product : Atlas Steel Company produces three grade of steel: high, good, and regular grade. Determine the unit contribution margin for each product

Write a program to read several lines of uppercase text : Write a program to read several lines of uppercase text and to produce a text concordance, which is a list of all distinct words in the text.

Impact of repealing the sarbanes oxley act would be : The current administration is trying to roll back many of the previous administration's financial regulations. Although I have not heard any comments.

Determine the contribution margin by glass type : Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production

Compute after-tax cash flow to the daily planet : The Daily Planet has a wholly owned foreign subsidiary in Brazil. The subsidiary earns 30 million reals per year before taxes in Brazil.

How much would the crow manufacturing total income : How much would the Crow Manufacturing's total income from operations increase? How much would the Industrial Division's income from operations increase

Display each word together with its associated line numbers : In addition to the words in a section of text, a concordance usually stores the numbers of selected pages on which there is a significant use of the word.

Difference in traditional tax-deductible ira and roth ira : Describe and discuss the differences between a traditional tax-deductible Individual Retirement Accounts (IRA) and a Roth IRA.

What accounts should be debited and credited : Tracy invested $50,000 cash, a law library valued at $25,000, What accounts should be debited and credited for this transaction

User Account

All Pages