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Million investment by receiving rand

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Reference no: EM133112611

A U.S. firm contemplates a plant in South Africa. The company will recoup $ 150 million investment by receiving Rand (R) 300 million, R 375 million and R 400 million at the end of years 1, 2 and 3. Rand is expected to depreciate at 9% per year in the near term. Find dollar-equivalent NPV and IRR if current spot rate is R4.75/$ and $ cost of capital is 10%.

Reference no: EM133112611

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