Question
DavidLee Telco is planning on investing $45 billion in Europe this year for a satellite communications system. The expected cash flow for the first year
DavidLee Telco is planning on investing $45 billion in Europe this year for a satellite communications system. The expected cash flow for the first year is 21.57 billion Euros and growing at the rate of inflation. After three year they will abandon the system as worthless. The European current and expected inflation rate is 5.0% per annum over this period and the Canada inflation rate is expected to be 2.4% per annum. The current exchange rate is 1.16/CAD. DavidLee has a Canada cost of capital of 12%.
Compute the NPV of this project. Is it worth to invest?
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Handbook Of Digital Media And Communication
Authors: Leah Lievrouw ,Brian Loader
1st Edition
036761233X, 978-0367612337
