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Delta Company, a U.S. MNC, is contemplating making a foreign capital expenditure in South Africa. The initial cost of the project is ZAR10,600. The annual
Delta Company, a U.S. MNC, is contemplating making a foreign capital expenditure in South Africa. The initial cost of the project is ZAR10,600. The annual cash flows over the five-year economic life of the project in ZAR are estimated to be 3,200,4,180,5,170,6,10 and 7,150. The parent firm's cost of capital in dollars is 9.5 percent. Long-run inflation is forecasted to be 3 percent per annum in the United States and 7 percent in South Africa. The current spot foreign exchange rate is ZAR per USD = 3.75. Required: Complete this question by entering your answers in the tabs below. What is the NPV in dollars if the actual pattern of ZAR/USD exchange rates is: S(0)=3.75,S(1)=5.7,S(2)=6.7,S(3)= 7.2,S(4)=7.2, and S(5)=8.2? Note: Negative amount should be shown with a minus sign. Do not round the intermediate calculations. Round the final answer to the nearest whole number
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