Solution-Determine the npv for the project in usd

Determine the npv for the project in usd

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Reference no: EM132491488

Delta Company, a U.S. MNC, is contemplating making a foreign capital expenditure in South Africa. The initial cost of the project is ZAR12,000. The annual cash flows over the five year economic life of the project in ZAR are estimated to be 3,500; 4,500; 5,500; 6,500; and 7,500. The parent firm's cost of capital in dollars is 8.5%. Long-run inflation is forecasted to be 3.5% per annum in the U.S. and 7.25% percent in South Africa. The current spot foreign exchange rate is ZAR/USD = 3.75.

Determine the NPV for the project in USD.

Reference no: EM132491488

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Determine the npv for the project in usd : Delta Company, a U.S. MNC, is contemplating making a foreign capital expenditure in South Africa. The initial cost of the project is ZAR12,000.

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Determine the npv for the project in usd

Reference no: EM132491488

Reference no: EM132491488

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