User Account

All Pages

What are the NPV and IRR of the Norwegian project

Assignment Help Accounting Basics
Reference no: EM132619824

Question - UF, Inc. is considering the establishment of a subsidiary in Norway. The initial investment required by the parent is NOK40 million. If the project is undertaken, UF would terminate the project after four years. UF's cost of capital is 13%, and the project is of the same risk as UF's existing projects. All net cash flows generated from the project will be remitted to the parent at the end of each year. Listed separately below are the estimated cash inflows and outflows the Norwegian subsidiary will generate over the project's lifetime in millions of Norwegian kroner (NOK), and UF's forecast of future exchange rates. The current exchange rate of the Norwegian kroner is $0.135/NOK.

Required - What are the NPV (in $) and IRR of the Norwegian project?

Year1 ; inflow NOK18; outflow NOK8;FX rate $0.13 /NOK

Year2 ; inflow NOK25; outflow NOK10; FX rate $0.14/NOK

Year3 ; inflow NOK29; outflow NOK12; FX rate $0.12/NOK

Year4 ; inflow NOK40; outflow NOK15; FX rate $0.15/NOK

Reference no: EM132619824

Questions Cloud

Describe collective bargaining with example : Have you ever been involved in union organizing, collective bargaining, or worked in a union shop? If so, share your experience. If not, locate a scholarly.
Prepare the journal entry for Sage collection : Prepare the journal entry for Sage's collection of $373,500 of the accounts receivable during the period from April 1, 2020, through June 30, 2020
What purpose would the statement serve : In a corporation or business, who would likely use information from the statement of cash flows and what purpose would the statement serve?
What goal is the organization trying to accomplish : For this assignment, you are required to develop a small training exercise. Review your needs assessment and previous observations conducted on your work.
What are the NPV and IRR of the Norwegian project : UF, Inc. is considering the establishment of a subsidiary in Norway. What are the NPV (in $) and IRR of the Norwegian project
What will the sold contribute to operating profits : 450 units, variable costs were $675 and fixed costs were $405. What will the 451st unit sold contribute to operating profits before income taxes?
Briefly discuss the features of costing system : Briefly discuss the features of costing system. Identify 2 specific Australian companies that your chosen costing system is suitable for, and explain why.
How much confidence do you have in your forecast : Also, estimate the spot FX rates which will obtain for the next five years. How much confidence do you have in your forecast
What would you identify as your phenomenon of interest : Think about your selected scenario from the perspective of the role you have chosen. What would you identify as your phenomenon of interest based.

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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