The Daily Planet has a wholly owned foreign subsidiary in Brazil. The subsidiary earns 25 million reals per year before taxes in Brazil. The foreign income tax rate is 30%. The subsidiary repatriates the entire after-tax profits in the form of dividends to the Daily Planet. The US corporate tax rate is 40% of foreign earnings before taxes. a. computer after-tax cash flowto the Daily Planet from this investment in reals.

b. if the exchange rate is .40 ($/reals), what is the after-tax cash flow in dollars?

c. depreciation related cash flow is 3 million reals per year for five years for another Daily Planet investment in Brazil. the exchange rate is expected to be .47 ($/real). The Daily Planet applies a 15% discount rate to foreign cash flows. What is the present value (in dollars) of the depreciation related cash flow?

5. The Daily Planet has a wholly owned fore in Brazil. The subsidiary cams 25. repatriates the entire baxes The foreign tax The US. after-tax profits in the form of dividends to the Daily Planet rate 40% of foreign ansings before taxes a) Compute after-tax cash flow to the Daily Planet from this investment in reals). use the table below. reals) Before tax eamings in oreign income tax at 30% Earnings after foreign income taxes Dividends repatriated Gross U s. taxes ar 40% of foreign earnings before taxes payable S. taxes After-tax cash flow b) the echange rate is 40 (sicals, what is une after-tax cash now in dollars? c) Depreciation related cash flow is 3 million reals per year for five years for another Dally Planet investment in Brazil. The exchange rate is expected lo be 47 ($/reals) The Daily dollars) of the discount flows. What is the present value depreciation related cash flow