Question
The U.S. based MNC that will expect cash flows of $ 400,000 from local business and 4,000,000 Mexican pesos from business in Mexico at the
The U.S. based MNC that will expect cash flows of $ 400,000 from local business and 4,000,000 Mexican pesos from business in Mexico at the end of three years of operation. The firm also has a subsidiary in Malaysia and will be expected to generate cash flows of 5,000,000 Malaysian Ringgit at the end of three years of operation. All the cash floes will be remitted to parent firm. The pesos value will be expected $0.09 and ringgits value will be expected $0.04. The weighted average cost of capital is 8% for all projects. You are required to calculate the expected value of MNC.
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