Folio 6: Projected cash flow: USE MS EXCEL to forecast your foreign sales and earnings in foreign currency for 2023 and forecast for next four years using the variables given in the table below. Prepare a forecasted cash flow from 2023 to 2027. Using cost of capital from Folio 5, and using MS Excel, 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.

Note : : product: Honey - CANADA - Proposed investment in Germany

cost of capital : 1Million CAD

Variables:

Growth Rate of Sales : 5.0% per annum

Growth rate of sales price - 2.0% Per annum +Inflation rate

Growth Rate of Variable Costs -Inflation rate

Growth Rate of Variable Costs -Inflation rate

Amount of Local Financing: 900,000 CAD

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 6.0%

Yearly Exchange Rate for cashflow conversion As per your forecast From Folio 4 (put assumption)

Initial Investment in Foreign currency - 0.5 Million CAD

Straight line depreciation Salvage value (Assume 10% of initial investment

Discount Rate (Required rate of return) - put assumption