Zimmer, a manufacturer of modular rooms plans to expand its operations on Landshut, Germany. The expansion will cost $14.5 million and is expected to generate annual net cash flows of 2.15 million euros for a period of 12 years and then the operation will be sold for one million euro (net of taxes). the cost of capital for the project is 14%. Using a spot exchange rate of $1.25/euro as the forecast FX rate for the euro for hte term of the project, compute hte NPV of this expansion project.

I saw the answer to this on one of the posts. I just don't get it. Is terminal value the selling price (the 1 million)? And the formula for present value for cash inflows and how you end up with 5.66 million, present value of cash inflows as 12..17 euros and a total present value in euro of 12.38 and $ is 15.47. NPV at the end is pv of cash inflows - investment = 15.47 million minus 14.5 (expansion cost) is the only thing that makes sense. How do you do the calculate the present value of cash inflows and salvage amount to get the two numbers to add together to get total present value? If you could show me how with the formulas that would be awesome. It's great to have an "answer" but I just need to also know how to do it. $0.97 million is the answer