b. how much is the total initial cash flow for this project?

c. how much are the cash flows that should be added at the end of year 2 to close operations?

d. how much is the effective cash flows to the parent at the end of year 1 if there are no restrictions on the reputation of cash flows from the subsidary?

QUESTION 19 Use the following information to answer the next four questions: Palo Alto Electronics (PAE) of the US exports 90,000 units of computer parts per year to Argentina. It sells them for the equivalent of $60 per unit. Total current cost is $48 per set. PAE is studying the possibility of establishing a subsidiary in Argentina to produce and sell the parts locally, Sales volume and price would not be affected. The cost of plant and equipment would be $3,000,000 plant and equipment will be fully depreciated to book value of zero on a straight-line basis for two years. Their market salvage value is estimated at $900,000 at the end of year two. The upfront networking capital needs are $1,200,000. The level of NWC will not change in the interim period. The subsidiary would import all its raw materials from the parent at a cost of $14 per set. Additional local costs for the subsidiary are $6 per set. PAE's pre-tax profit margin on the 514 sale is 57. Tax rate in the US and Argentina is 10% The WACC for PAE and its subsidiary is 15%, Fundamental and Powerful Concept 10: Calculate the year-one net cash flows from the perspective of the subsidiary 52.160.000 52,760.000 52.544.000 53.660.000 Other. Please specify bok Sate and Subtn bt. Click Save All Answers to save all answers Save Ant