Use the following information to answer the next three questions:

Compact Computers, Inc, a video game development company, has decided to build production capability in the Philippines. At the moment, only the following summary of expected aftertax cash flows is available.

Year

Peso cash inflows

Peso cash outflows

S cash outflows

45.000

21,000

718,800

29.600

1.150

712.400

24.200

2.220

812.400

64.300

3.700

The exchange rate today is P56.3628/S. Whiz expects the peso to depreciate by 4% per year against the U.S. dollar for the coming three years. The WACC for Whiz Computers is 12%

Calculate the currency rate at the end of year 2.

Answers:

P51.9440/S

P61.1576/S

P60.9620/S

P52.1106/$

None of the above

Question 17

Suppose $3 is P60.4680/$, what are the expected net dollar cash flows at the end of year three?

Answers:

$12.372

$8.672

$16,072

$12,311

$47.232.411

the net dollar cash flows at the end of year two are $45,000,000, calculate their present value at time point zero.

Answers:

$40.178,571

$32.030.111

$35,873,724

$33.316.398