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NSA Inc., a U . S . firm, is considering an investment project in England. The current exchange rate is $ 1 . 2 =

NSA Inc., a U.S. firm, is considering an investment project in England. The current exchange rate is $1.2=1. The firm assumes that the exchange rate will remain the same for the next 3 years. Based on the agreement with the U.K. government, the firm will be able to remit 100% of the cash flows generated from the project, but the government will levy a 10% withholding tax on the remittance. The monetary amounts in the following tables are denominated in the pound. What is the NPV (in the U.S. dollar) of the project?
\table[[Equipment economic life (year),3],[WACC for the project,0.10],[Nominal growth rate,0.05],[Foreign tax rate (T),0.40],[,100],[Initial investment in NWC,800],[Cost of equipment,1,000],[Cost of factory building,200],[Salvage value, equipment,800],[Salvage value, factory building,4,000],[Revenue (year 1),200],[Fixed cost (year 1),0.40],[Variable cost (% of revenue),300],[,],[Annual depreciation,100%
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