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5 Rio, Inc., is proposing to construct a new healthcare facilities in a country facing population aging issues. The two prime candidates are China and
5 Rio, Inc., is proposing to construct a new healthcare facilities in a country facing population aging issues. The two prime candidates are China and Japan. The forecasted cash flows from the proposed plants are as follows: CO C1 C2 C3 C4 China (Bill ions of RMB) -5 1.5 2.4 3.3 10 Japan (Billions of JPY) -65 10 14 20 65 The spot exchange rate for RMB is 1USD=6.75 RMB while the rate for Japaness Yen is 1USD=103JPY. The interest rate is 4% in the United States, 3% in Japan, and 5% in China. The financial manager has suggested that, if the cash flows were stated in dollars, a return in excess of 8% would be acceptable. A. Calculate the NPV in dollars for the facility China. B. Calculate the NPV in dollars for the facility in Japan
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