Solution-Find exchange rate of brl to 1 cad in year 3

Find exchange rate of brl to 1 cad in year 3

Reference no: EM133002244

Alpha Inc. wants to construct a manufacturing plant in Brazil. The construction will cost 900 million Brazilian Real. Alpha intends to operate the plant for 3 years. During the 3 years of operation, Real (BRL) cash flows are expected to be 300 million BRL, 300 million BRL, and 200 million BRL, respectively.

Operating cash flows will begin 1 year from today and are remitted back to the Canadian parent at the end of each year. At the end of the third year, Alpha expects to sell the plant for 500 million BRL.

If the required rate of return is 12%, revised salvage value is 650 million BRL and It currently takes 2.8743 BRL to buy 1 Canadian dollar, BRL depreciates by 7.5% every year.

Find Exchange rate of BRL to 1 CAD in year 3

Reference no: EM133002244

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Find exchange rate of brl to 1 cad in year 3

Reference no: EM133002244

Reference no: EM133002244

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