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Bach Corporation A. Assume that Bach Corporation is considering the establishment of a subsidiary in Norway. The initial Norwegian Kroner investment required by the parent

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Bach Corporation A. Assume that Bach Corporation is considering the establishment of a subsidiary in Norway. The initial Norwegian Kroner investment required by the parent (in Year ) is Kr 40,000,000.ie project is undertaken, Bach would terminate the project after four years. Bach's.cost of capitalis 13%, and the project is of the same risk as Bach's existing projects. Al cash flow generated from the project will be remitted to the parent at the end of each year. Listed below are the estimated cash flows the Norwegian subsidiary will generate over the project's lifetime in Norwegian Krone (NOK) Year Year 2 Yew 3 Year 4 -NOK 40,000,000 NOK 10,000,000 NOK 15,000,000 NOK 17,000,000 NOK20,000,000 The current exchange rate of the Norwegian kroner is K11.32525. Bach's exchange rate forecast for the Norwegian kroner over the project's lifetime (in kroner per dolar) is listed below. Year 0 Year 1 Year 2 Year 3 Year 4 8.3253 7.6923 71428 6.8065 6.6666 What is the NPV of the project in USD O A 5998,562 B. $1.112.836 OC. $1,398,031 OD $1,538.788

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