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An MNC is considering establishing a twoyear project in New Zealand with a $30 million initial investment. The firm's cost of capital is .12. The
- An MNC is considering establishing a two‑year project in New Zealand with a $30 million initial investment. The firm's cost of capital is .12. The required rate of return on this project is 0.15. The project is expected to generate cash flows of NZ$11,900,000 in Year 1 and NZ$31,200,000 in Year 2, excluding the salvage value. Assume no taxes, and a stable exchange rate of $0.51 per NZ$ over the next two years. All cash flows are remitted to the parent. What is the break-even salvage value in New Zealand dollars?
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Financial management theory and practice
Authors: Eugene F. Brigham and Michael C. Ehrhardt
13th edition
1439078106, 111197375X, 9781439078105, 9781111973759, 978-1439078099
