Question
A US MNC has invested in a project in Brazil for three years. 10m Brazilian Real were to be remitted every year for this project
A US MNC has invested in a project in Brazil for three years. 10m Brazilian Real were to be remitted every year for this project for next 3 years. The funds cannot be remitted due to blocked funds and company will have to reinvest it at 6% locally. Withholding tax rate and discount rate are 10% each. The exchange rate will be a constant value of $0.20. Calculate the NPV of this project if parent company invested $5m initially.
-$694,605
- $778452
-$1,125,145
-$1,162,998
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Introduction to Finance Markets, Investments and Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
16th edition
1119398282, 978-1-119-3211, 1119321115, 978-1119398288
