international finance

Suppose you are evaluating a proposed expansion of an existing subsidiary located in France. The cost of the expansion would be € 2 million. The cash flows are expected to be € 0.9 million a year for the next three years. The dollar required return is 10 percent per year, and the current spot exchange rate for Euros is € 0.5. The risk-free rate in the United States is 5 percent, and the risk-free rate in “Euro-land” is 7 percent.

Using home currency and foreign currency approach decide whether the expansion should made or not on the basis of NPV.

  1. 👍
  2. 👎
  3. 👁
  1. the answer of the ff quetions
    Suppose you are evaluating a proposed expansion of an existing subsidiary located in France. The cost of the expansion would be € 2 million. The cash flows are expected to be € 0.9 million a year for the next three years. The dollar required return is 10 percent per year, and the current spot exchange rate for Euros is € 0.5. The risk-free rate in the United States is 5 percent, and the risk-free rate in “Euro-land” is 7 percent.

    Using home currency and foreign currency approach decide whether the expansion should made or not on the basis of NPV

    1. 👍
    2. 👎
  2. Answer for this question

    1. 👍
    2. 👎
  3. Suppose you are evaluating a proposed expansion of an existing subsidiary located in France. The cost of the expansion would be € 2 million. The cash flows are expected to be € 0.9 million a year for the next three years. The dollar required return is 10 percent per year, and the current spot exchange rate for Euros is € 0.5. The risk-free rate in the United States is 5 percent, and the risk-free rate in “Euro-land” is 7 percent. Using home currency and foreign currency approach decide whether the expansion should made or not on the basis of NPV

    1. 👍
    2. 👎
  4. Give the solution

    1. 👍
    2. 👎
  5. Suppose you are evaluating a proposed expansion of an existing subsidiary located in France. The cost of the expansion would be € 2 million. The cash flows are expected to be € 0.9 million a year for the next three years. The dollar required return is 10 percent per year, and the current spot exchange rate for Euros is € 0.5. The risk-free rate in the United States is 5 percent, and the risk-free rate in “Euro-land” is 7 percent.

    1. 👍
    2. 👎

Respond to this Question

First Name

Your Response

Similar Questions

  1. SS

    Well I cant find anything for social studies. No one ever wants to post them... But In what way did Beveridge think overseas expansion would help solve labor problems in the united states? A: Expansion would bring new foreign

  2. Math

    The cost of producing x units of a certain commodity is given by P(x)=1000+ int(MC(s))ds from 0 to x, where P is in dollars and M(x) is marginal cost in dollars per unit. A. Suppose the marginal cost at a production level of 500

  3. Math

    2. The cost of producing x units of a certain commodity is given by Px  1000  0 x MCsds, where P is in dollars and Mx is marginal cost in dollars per unit. A. Suppose the marginal cost at a production level of 500 units is

  4. History

    Which of the following describes the effect of the 1763 Treaty of Paris on France's American land holdings? France retained its territory in Detroit, Quebec, and Montreal. France lost its territory in Canada and east of the

  1. History

    What happened after the Haitian Revolution? A) France paid reparations for losses to the new Haitian government. B) France declared war on Spain over control of the Dominican Republic. C) France received reparations for loss of

  2. calculus

    using the two existing corner sides of an existing wall, what is the maximum rectangular area that can be fenced by a fencing material 30 ft long?

  3. Accounting

    Suppose you are evaluating a proposed expansion of an existing subsidiary located in France. The cost of the expansion would be € 2 million. The cash flows are expected to be € 0.9 million a year for the next three years. The

  4. American History

    Compare and Contrast American Expansion in the late 1800's with the expansion in the 1900's. (How the expansion efforts were the same and how they were different.) During the expansion of the late 1800's and early 1900's shared

  1. Spanish 1

    Which of the following geographical locations share borders with SPAIN? 1)Portugal, France, Atlantic Ocean 2)France, England, Pacific Ocean 3) Italy, France, Mediterranean Sea I think #1 Thank you

  2. history

    Which describes the Crimean War? A. a war by Britain, France, and the Ottoman Empire to prevent Russian expansion in the Black Sea region B. a war by Britain to conquer the Ottoman Empire in order to gain access to the Gulf of

  3. International finance

    Suppose you are evaluating a proposed expansion of an existing subsidiary located in France. The cost of the expansion would be € 2 million. The cash flows are expected to be € 0.9 million a year for the next three years. The

  4. History

    What happened after the Haitian Revolution? france recieved reparations for loss of property france paid reparations for losses to the new haitian governemt france abolished slavery in jamaica and cuba france declared war on spain

You can view more similar questions or ask a new question.