Question

Das PLC is a thriving supermarket that specializes in the production of South Asian food and drink and has its headquarters in the UK. The business has fully established a chain of 20 supermarkets across major cities of the UK.

The company seeks to expand its business overseas. The Chief Financial Officer (CFO) has proposed an expansion to Doaba; the original country from which the company imports its produce. Das PLC is highly popular in the country of Doaba and has been recognized by the Government for its ethical values. Das is known to pay its workers a fair wage and is committed to its custom duty whilst exporting goods.

The Chief Executive Officer welcomes the idea of supplying its produce in Doaba however is concerned about the increased competition against competitors, a problem that was almost non-existent for Das in the UK market. The CFO has promised that the business will be able to distinguish its product ethically by promoting Fair-trade and promises to provide top quality produce.

Proposed Investment

The CFO's projected cash flows from the project are presented in the chart in the local currency of Daoba Rupees ():

Projected Sales in Doaba from year 1 to year 5 respectively 8 7.86 7.8 Millions of Rupees 7.59 7.6 7.45 7.4 7.32 7.2 6.95 6.8 6.6 6.4 Years