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Nebraska Co. plans to pursue a project in Argentina that will generate revenue of 7 million Argentine pesos (AP) at the end of each of

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Nebraska Co. plans to pursue a project in Argentina that will generate revenue of 7 million Argentine pesos (AP) at the end of each of the next four years. It will have to pay operating expenses of AP2 million per year. The Argentine government will charge a 30 percent tax rate on profits. All after-tax profits each year will be remitted to the U.S. parent and no additional taxes are owed. The spot rate of the AP is presently $0.25. The AP is expected to depreciate by 10 percent each year for the next four years. The salvage value of the assets will be worth AP28 million in four years after capital gains taxes are paid. The initial investment will require $10 million, half of which will be in the form of equity from the U.S. parent and half of which will come from borrowed funds. Nebraska will borrow the funds in Argentine pesos. The annual interest rate on the funds borrowed is 13 percent. Annual interest (and zero principal) is paid on the debt at the end of each year, and the interest payments can be deducted before determining the tax owed to the Argentine government. The entire principal of the loan will be paid at the end of year 4. Nebraska requires a rate of return of at least 19 percent on its invested equity for this project to be worthwhile. Determine the NPV of this project. Do not round intermediate calculations. Round your answer to the nearest dollar. Use a minus sign to enter a negative value, if any. $ Should Nebraska pursue the project? Nebraska -Select- pursue the project

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