Determine the npv in usd by calculating the npv

Assignment Help Accounting Basics
Reference no: EM133032226

Question - Delta Company, a U.S. MNC, is contemplating making a foreign capital expenditure in South Africa. The initial cost of the project is ZAR100. The annual cash flows over the five year economic life of the project in ZAR are estimated to be 28, 35, 39, 47, and 54. The parent firm's cost of capital in dollars is 8.3 percent. Long-run inflation is forecasted to be 2.9 percent per annum in the U.S. and 9 percent in South Africa. The current spot foreign exchange rate is USD/ZAR = 14.98 (Rand/$).

Required - Determine the NPV in USD by calculating the NPV in ZAR using the ZAR equivalent cost of capital according to the Fisher Effect and then converting to USD at the current spot rate.

Reference no: EM133032226

Questions Cloud

Compute residual income, using net book value for each year : In computing ROI, this division uses end-of-year asset values in the denominator. Compute residual income, using net book value for each year
Determine the budgeted units of inventory for march : The Cardinal Company wishes to maintain a desired ending finished goods inventory of 20% of the following month's sales. Determine budgeted units of inventory
Describe sampling theory : Describe sampling theory and provide examples to illustrate your definition. Discuss generalizability as it applies to nursing research.
Outline three importance of inventory management : Question - Bad Dawg produces pork sausages annually which requires 0.2 kilogram of raw material. Outline three importance of inventory management
Determine the npv in usd by calculating the npv : Determine the NPV in USD by calculating the NPV in ZAR using the ZAR equivalent cost of capital according to the Fisher Effect and then converting to USD
By how much would capital invested in accounts receivable be : By how much would the capital invested in accounts receivable be reduced if the turnover could be increased to 6 without a loss of sales
Healthcare program-policy evaluation analysis : Describe the healthcare program or policy outcomes. How was the success of the program or policy measured?
What is deltas current value per share rounded : Alpha wishes to acquire Delta. The relevant WACC is 10%. And it is expected to grow thereafter at 5% annually. What is Deltas current value per share rounded
Program Planning, Implementation and Evaluation Plan : Develop a program logic model and critically analyse the link between the components of Program logic model and Program theory in public health program design

Reviews

Write a Review

Accounting Basics Questions & Answers

  It is the end of november and natalie has been in touch

it is the end of november and natalie has been in touch with her grandmother. her grandmother asked natalie how well

  Calculate the current break-even point in units

Calculate the current break-even point in units, and compare it to the break-even point in units if Mary's ideas are used.

  What amount of depreciation exprense would the company

a company purchases equipment for 225000 on july 12009 with an estimated useful life of 10 years and expected salvage

  Should Avon cosmetics push the approach

The face powder's probability is judged to be 40%. Construct a decision tree diagram. Should Avon cosmetics push the approach? Explain why

  What is a constructive dividend

What is a constructive dividend? Under what circumstances is the IRS likely to argue that a constructive dividend has been paid

  Prepare necessary journal entries to account for income tax

Deferred tax liability $18,000 Deferred tax asset 15,000. Prepare necessary journal entries to account for income tax assuming recognition criteria satisfied

  How much is the income tax due of the said alien

The interest amounted to $500. How much is the income tax due of the said alien? ($1=Php50)

  Identify five key characteristics of fraudsters

Based on KPMG's analysis in "Global Profiles of the Fraudsters" of the 596 fraudsters member firms investigated, identify five key characteristics of fraudsters

  What are advantages and disadvantages to using xbrl

Forecasting Cash Payments and Receipts in crucial to effective Cash management. What parts of an AIS can assist with this process in your opinion?

  Conducting an audit of sales for sunbeam computer

You are conducting an audit of sales for Sunbeam Computer a retail chain store with an integrated IT system in which computerised cash registers are integrated.

  How much revenue per account would be sufficient for sprint

sprint nextel is one of the largest digital wireless service providers in the united states. in a recent year it had

  What is the quick ratio

Consider the following information: Total current assets $78,632, Deferred income taxes $3,210 and Inventories $9,823. What is the quick ratio

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd