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Senser Co . established a subsidiary in Russia two years ago. Under its original plans, Senser intended to operate the subsidiary for a total of
Senser Co established a subsidiary in Russia two years ago. Under its original plans, Senser intended to operate the subsidiary for a total of four years. However, it would like to reassess the situation because exchange rate forecasts for the Russian ruble indicate that it may depreciate from its current level of $ to $ next year and to $ in the following year. Senser could sell the subsidiary today for million rubles to a potential acquirer. If Senser continues to operate the subsidiary, it will generate cash flows of million rubles next year and million rubles in the following year. These cash flows would be remitted back to the parent in the United States. The required rate of return of the project is percent. Should Senser Co continue operating the Russian subsidiary? Do not round intermediate calculations. Round your answer to the nearest dollar. Use a minus sign to enter a negative value, if any.
The net present value of the divestiture is $
Since the present value of the cash flows is than the price it
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