Company name: Tim Hortons

Host country: Canada

Exporting Country: India

USE EXCEL to forecast your foreign sales from FDI and earnings in foreign currency for 2022 and forecast for next four years using the variables given in the table below. Prepare a forecasted cash flow from 2022 to 2026.

Calculate Net Present Value (NPV) of the investment using above cashflow calculations. Decide to pursue FDI or drop the proposal based on NPV of the project.

SUGGETSED INPUTS for NPV

Growth Rate of Sales Growth rate of sales price	5.0% per annum 2.0% Per annum +Inflation rate
Growth Rate of Variable Costs (VC cost can be a certain percentage of Sales)	Inflation rate
Growth Rate of Fixed Costs (FC cost can be a certain percentage of Sales)	Inflation rate
Amount of Local Financing	Your choice from Folio 7
Interest Rate on Local Financing	Based on prime rates in target country
Host Country Tax Rate	Based on target country corporate tax rate
Withholding Tax on Remitted Funds	Assume 10.0%
Yearly Exchange Rate for cashflow conversion As per your forecast	From Folio 6
Initial Investment in Foreign currency	Your choice from Folio 7
Straight line depreciation	Salvage value (Assume 10% of initial investment)
Discount Rate (Required rate of return)	10%