A US MNC has invested in a project in Brazil for three years. 10m Brazilian Real were to be remitted every year for this project for next 3 years. The funds cannot be remitted due to blocked funds and company will have to reinvest it at 4% locally. Withholding tax rate and discount rate are 10% each. The exchange rate will be a constant value of $0.24. Calculate the NPV of this project if parent company invested $5m initially.     $1,837,002     -$1,048,710     $799,392     -$65,857

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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A US MNC has invested in a project in Brazil for three years. 10m Brazilian Real were to be remitted every year for this project for next 3 years. The funds cannot be remitted due to blocked funds and company will have to reinvest it at 4% locally. Withholding tax rate and discount rate are 10% each. The exchange rate will be a constant value of $0.24. Calculate the NPV of this project if parent company invested $5m initially.

   

$1,837,002

   

-$1,048,710

   

$799,392

   

-$65,857

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