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A US based computer manufacture produces and sells laptops in South America through two manufacturing facilities: one in Argentina and the other in Brazil. The

A US based computer manufacture produces and sells laptops in South America through two manufacturing facilities: one in Argentina and the other in Brazil. The following applies:

Argentina

Brazil

Investment price

200 million US$

200 million US$

Cost per Laptop

900 pesos

600 reals

Price per Laptop

1200 pesos

800 reals

Projected Annual Earnings

150 million pesos

100 million reals

Exchange Rate

Pesos 3 / US$

Reals 2/US$

If Brazil real depreciates 20% against the US$, what is the return on investment in Brazil, if other things remain the same?

15%

20%

25%

30%

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