7) (5 pts) Electron US is a US MNC that is considering establishing a subsidiary in Thailand that would manufacture and sell specialty computer parts locally. Calculate the NPV from Electronus perspective. Relevant cash flows are given below: . . - The project would require a manufacturing facility (plant), equipment and working capital that are expected to cost 50 million Thal Bhat (THB). -The project is expected to last for 3 years and generate operating cash flows of 16 million THB per year after all taxes imposed by the Thai government. -At the end of 3 years, the Thai government has promised to purchase the plant from the ElectronUS for 25 million THB. -The spot exchange rate is $0.052/1THB and the expected exchange rate over the next three years is: Year o Year 1 Year 2 Year 3 $0.052 $0.051 $0.050 $0.049 -The subsidiary plans to send all net cash flows back to the parent firm at the end of each year. -The required rate of return for this project is 9%. Yr 0 Y1 Yr 2 Yn 3 Initial Investment -50 million THB (50,000,000) OCF produced XD 052 By the Subsidiary 16 mil THB XOOS 16 mil THB X0.050 16 mil THB xo.org 25 mil THB X 0.04 S$ Salvage value US$ dollars paid/received 78400 0 Electronus (2600000) 816000 800000 1225000 200 900 - 2600000 816000 800000 (1+0.og)" (T+0.09) (1+0.09)2 200 9000 -(2600000) + 748624 + 673344 +1551317 (1+0.0913 _373285 NPV