Score: 0 of 25 pts 3 of 4 (1 completo) HW Score: 16.67%, 16.67 of 100 pts Problem 18-4 (algorithmic) Question Help Natural Mosaic Natural Mosaic Company (U.S.) is considering investing Rs54,000,000 in India to create a wholly owned the manufacturing plant to export to the European market. Alter five years, the subsidiary would be sold to Indian investors for Rs108,000,000. A pro forma income statement for the Indian operation predicts the generation of Rs12,500,000 of annual cash flow, is listed in the popup table. The initial investment will be made on December 31, 2011, and cash flows will occur on December 31st of each succeeding year Annual cash dividends to Natural Mosaic from India will equal 80% of accounting income. The U.S. corporate tax rate is 40% and the Indian corporate tax rate is 50%. Because the Indian tax rate is greater than the U.S. tax rate, annual dividends paid to Natural Mosaic will not be subject to additional taxes in the United States. There are no capital gains taxes on the final sale. Natural Mosaic uses a weighted average cost of capital of 15% on domestic investments, but will add six percentage points for the Indian Investment because of perceived greater risk. Natural Mosaic forecasts for the rupee/dollar exchange rate on December 31 for the next six years are listed in the popup table, a. What is the net present value and internal rate of return on this investment from the project's viewpoint? b. What is the not present value and internal rate of return on this investment from the parent's viewpoint? a. Calculate the cash flows in Indian rupees for years 2011 through 2013 below. (Round to the nearest whole number.) 2011 2012 12,500,000 Rs 2013 12,500,000 Rs (54,000,000) Rs Annual cash flow (Rs) Initial investment (Rs) Sale value (Rs) Cash flows for discounting (Rs) Rs Rs Rs nter any number in the edit fields and then click Check Answer. parts remaining t.doExercle: Clear All Check Answer MacBook Air 24 $ 4 5 6 7 8 9 W E R T Y U 0 - -) is considering investing Rs54,000,000 in India to create a wholly owned tile manufacturing plant to export investors for Rs108,000,000. A pro forma income statement for the Indian operation predicts the generatic initial investment will be made on December 21 2011 and cash flow will occur on December 31st of each Data Table nual dividends Je cost of capita rupee/dollar ex Sales revenue Rs33,000,000 Less cash operating expenses (12,000,000) Gross income Rs21,000,000 Less depreciation expenses (4,000,000) Earnings before interest and taxes Rs17,000,000 Less Indian taxes at 50% (8,500,000) Net income Rs8,500,000 Add back depreciation 4,000,000 Annual cash flow Rs12,500,000 Print Done en click Check Answer. Clear All C MacBook Air DII fd FS FO F7 F9 EVO $ A * % 5 4 6 & 7 8 9 0 R T Y U - 0 HWS 3 of 4 (1 complete) (U.S.) is considering investing Rs54,000,000 in India to create a wholly owned tile manufacturing plant to Indian investors for Rs 108,000,000. A pro forma income statement for the Indian operation predicts the ge The initial investment will be made on December 31, 2011, and cash flows will occur on December 31st o equal 80% of accounting income. e Indian corporate tax rate is 50%. Because the Indian tax rate is greater than the U.S. tax rate, annual divic Stal e cost of points A Data Table x rupee/do up tal - nala mnald Des foi 2011 2012 2013 Rs/$ 47 51 55 2014 2015 2016 Rs/$ 59 63 67 Print Done Rs Rs Rs nd then click Check Answer. Clear All MacBook Air 80 F3 888 DIM FS F6 DD F9 F7 FB EVO $ 4 5 6 7 8 9 0 TRGT