Compute the au- denominated npv for this project

Reference no: EM133331785

Question: BHP Australia is considering an international investment opportunity in France, which will generate $160,000 in the first year, and - (100,000 in the second year with initial investment of E64,000. The current exchange rate is $1.60/E. Inflation in Australia is 6% and 2% in France. The appropriate cost of capital for BHP Australia for a domestic project of the similar risk is 8%. Compute the AU$- denominated NPV for this project by using Australian dollar cash flows method.

Reference no: EM133331785

Questions Cloud

Importance of the caricom declaration of labour : Explain, using FIVE (5) points, the importance of the CARICOM Declaration of Labour and Industrial Relations on industrial relations within the region.?

What are the advantages of a mentoring program : What are the advantages of a mentoring program? Can they hurt an organization? What makes a good mentoring program?

What is the firm optimal debt ratio : What is the firm's optimal debt ratio? How does the firm get to optimal and what type of financing should be used? Short term or long term?

What is this firm after-tax wacc : Pfd Company has debt with a yield to maturity of 6.4%, a cost of equity of 13.9%, and a cost of preferred stock of 10.3%. The market values of its debt

Compute the au- denominated npv for this project : BHP Australia is considering an international investment opportunity in France, which will generate $160,000 in the first year

Describe the process of mean-variance portfolio optimisation : Describe the process of mean-variance portfolio optimisation. What data do you need, and what assumptions do you need to make, to undertake mean-variance

Calculate the debt-to-equity and times interest earned ratio : Discuss what each of these ratios tells you about the company's use of debt and how it compares to the industry average. Identify the major causes of any change

Calculate the current ratio and quick ratio from northrop : Discuss what each of these ratios tells you about the company's current financial condition, and how they compare to the industry averages.

What are the cash flows for the project for each year : What are the cash flows for the project for each year? What discount rate should the firm use for the project? Should Peter accept the project? Why or why not

User Account

All Pages