Youandi PLC is an MNC from Mexico planning to invest in Kenya, the research shows the following cashflows for the year 1,2,3 and 4 of investment as Kshs.7,200,000, Ksh.15,400,000, Ksh.28,940,000 and Ksh.39,140,000 respectively. The exchange rates for the first to year four were Ksh.101/$, Ksh.103/$, Ksh.100/$ and Ksh.102/$ respectively.

Additional Information:

Cash remittance to foreign countries at 10% and any remittance to Mexico is taxed at

10%, required rate of return is 10%, the exchange rate at the point of exchange was

Kshs.80/$ and the initial investment is Ksh.5,000,000.

Required:

Evaluate the investment from subsidiary and parent perspective. (10 marks)