uestion Trelimax (Ltd), South Africa, , is a specialist manufacturer of roller door. In seeking to expand its operations, it has the opportunity to acquire an American subsidiary company, Door Dynamics or set up a new division in South Africa. The relevant figures for these two options are as follows Set up new division at home (RSA) Costs Cost of premises Machinen Annual Sales Annual variable cost Additional head office expense Existing head office expenses Depreciation: machinery (10% Rands 30 400 000 22 000 000 13 000 000 5 000 000 1 000 000 500 000 Acquisition (Door Dynamics) Costs Acquire shares from existing shareholders Redundancy cost Annual Sales Annual variable cost Annual fixed cost Consultation fees Rands 10 000 000 3 500 000 18 000 000 9 500 000 3 500 000 5 800 000 Additional information Project life is 10 years Trellmax current cost of capital is 12% Inflation in the USA is expected to be below the South African inflation by 3% per year, throughout the life of the project. Assume an exchange rate of R14 to 1 USD . . Required 1) Make all the necessary calculations for the 2 options 2) Advise Trellimax on the viability of the 2 options