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Beta Inc. wants to construct a manufacturing plant in Brazil. The construction will cost 900 million Brazilian Real. Beta intends to operate the plant for
Beta Inc. wants to construct a manufacturing plant in Brazil. The construction will cost 900 million Brazilian Real. Beta intends to operate the plant for 3 years. During the 3 years of operation, Real (BRL) cash flows are expected to be 300 million BRL, 300 million BRL, and 200 million BRL, respectively. Operating cash flows will begin 1 year from today and are remitted back to the Canadian parent at the end of each year. At the end of the third year, beta expects to sell the plant for 500 million BRL. Beta has a required rate of return of 17%. It currently takes 2.8743 BRL to buy 1 Canadian dollar, and the BRL is expected to depreciate by 5 percent per year. What's the Year 3 cashflow in BRL 300 Million 900 Million 700 Million 800 Million
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