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Assume a Malaysian MNC is considering a 'greenfield' investment in a foreign country. Your group can choose any suitable foreign country for this project. The project is expected to cost MYR100 million and would generate local currency cash flows in the country it is operating equivalent to 20% of the project cost in the first year. The cash flows are expected to increase 20% annually over the next four years. At the end of Year 5, the project could be sold for 20% of initial cost. Additionally, the project is expected to have negative impact on the MNC's domestic cash flows due to lost exports from a competing older product line. The negative impact is estimated to be MYR2 million per annum until the project is sold. Any remittances to the outside world, including terminal sale proceeds from the project, would attract a 20% withholding tax. For this type of investment, your company would expect a minimum return of 12% per annum.
Calculate the NPV and IRR of this investment from the project's viewpoint and the parent's viewpoint? Should the company invest in this project? Why or why not? What would be the impact on your answer if there is no withholding tax?
Suppose the company in #1 is considering the following expansion projects. How would you calculate the required rate of return to use in the NPV analysis.
The company needs a cash infusion of $1.5 million, and it can issue equity or issue debt with an interest rate of 9 percent. Assume there are no corporate taxes.
Provide an example of how you feel that Michael Porter's Five Forces helps organizations with overall global strategy.
Cash (10% of Sales) 60% first month after sale 40% second month after sale Total Receipts Receivables at the End of June 90% of June Sales 40% of May Credit Sales Total.
Calculate the standard deviations for Roll and Ross by filling in the following table (verify your answer using returns expressed in percentages as well asdecimals)
the shareholders of the pickwick paper company need to elect five directors. there are 200000 shares outstanding. how
During the following year, the company wrote off $11 of accounts receivable as uncollectible and then estimated $9 of the year's receivables to be uncollectible. The company did not recover any previously written-off accounts.
You are considering the purchase of a 10 year, 12% semiannual coupon bond. If you required an annual effective rate of return of 10.25%.
Money Market Deposit Accounts : - How does a money market deposit account differ from other bank sources of funds?
Your company is considering building a plant which produces coin-operated cappuccino machines in Japan. The project costs ¥ 1,000,000 (year 0) and is expected to generate a cash flow of ¥ 500,000, ¥ 600,000, and ¥ 400,000 in the next three followi..
A dealer sells 6 such cars. What is the probability that at least one of them will require repairs in the first six months?
Under the terms of her finance agreement she is required to make payments of $210/month for 60 months. What is the cash price of the car? (Round your answer to the nearest cent.)
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