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States of Poisonous Pink Limited is a firm based in owa, America is considering investing in a project at Poland. The duration of the project is 3 years. At the end of third years, Poisonous Pink Limited will sell the project to a local firm. The initial investment of the project is $300,000. According to Poisonous Pink Limited financial analyst, the cost of capital for the similar project in US is 15 percent. The projected cash flow as following:

States of Poisonous Pink Limited is a firm based in owa, America is considering investing in a project at Poland. The duration of the project is 3 years. At the end of third years, Poisonous Pink Limited will sell the project to a local firm. The initial investment of the project is $300,000. According to Poisonous Pink Limited financial analyst, the cost of capital for the similar project in US is 15 percent. The projected cash flow as following:

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Poisonous Pink Limited is a firm based in lowa, United States of America is considering investing in a project at Poland. The duration of the project is 3 years. At the end of third years, Poisonous Pink Limited will sell the project to a local firm. The initial investment of the project is $300,000. According to Poisonous Pink Limited financial analyst, the cost of capital for the similar project in US is 15 percent. The projected cash flow as following: Cash Flow PLN 30,000 PLN 70,000 PLN 12,000 Forecasted Exchange $3.3047 $3.3289 $3.3113 Year 1 3 Compute the potential investment's Net Present Value (NPV) and the salvage value of Poisonous Pink Limited if they sell the project at the end of year 3 to a local company.
Transcribed Image Text:Poisonous Pink Limited is a firm based in lowa, United States of America is considering investing in a project at Poland. The duration of the project is 3 years. At the end of third years, Poisonous Pink Limited will sell the project to a local firm. The initial investment of the project is $300,000. According to Poisonous Pink Limited financial analyst, the cost of capital for the similar project in US is 15 percent. The projected cash flow as following: Cash Flow PLN 30,000 PLN 70,000 PLN 12,000 Forecasted Exchange $3.3047 $3.3289 $3.3113 Year 1 3 Compute the potential investment's Net Present Value (NPV) and the salvage value of Poisonous Pink Limited if they sell the project at the end of year 3 to a local company.
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