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5. Suppose a US multinational firm estimates that a $150 million capi- tal expenditure in a new plant in an unstable developing country will have

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5. Suppose a US multinational firm estimates that a $150 million capi- tal expenditure in a new plant in an unstable developing country will have a life of 2 years before it is confiscated by the foreign government. During this 2-year period, the operating cash flows will be $100 mil- lion each year. In addition, the firm will be able to use the new facility to repatriate $10 million each year in funds that have been held in the country involuntarily. If the discount rate for the operations cash flows is 10% and the discount rate for the exchange control avoidance is 8%, what is the adjusted present value of the project? 6. What is a LOC What

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