Question: A B C D E F G H I Table 1: Value of cheap financing (in R$000) A W N - (Assuming 3P Turbo didn't

A B C D E F G H I Table 1: Value of cheap financing (in R$000) A W N - (Assuming 3P Turbo didn't take any hedging positions on foreign exchange risks) Cost of equipment (Euro) 120,000 Loan Rate from German Bank 6.0% Cost of equipment (R$) 504,000 Loan Rate from German Vendor 2.0% Spot Exchange Rate (R$/Euro) 4.2 Brazil inflation 9.0% Value of Loan (90% of Cost, Euro) 108,000.00 German inflation 5.0% CO 00 Tax rate 34% 10 11 12 0 2 3 4 5 13 Now 2017 2018 2019 2020 2021 14 15 Loan Payments in Euro (6%) EUR 25,638.81 _ EUR 25,638.81 EUR 25,638.81 EUR 25,638.81 EUR 25,638.81 16 Interest Payment (Before tax) EUR 6,480.00 EUR 5,330.47 EUR 4,111.97 EUR 2,820.36 EUR 1,451.25 17 Principal Repayment EUR 19,158.81 EUR 20,308.34 EUR 21,526.84 EUR 22,818.45 EUR 24,187.56 18 Interest Payment (After tax) EUR 4,276.80 EUR 3,518.11 EUR 2,713.90 EUR 1,861.44 EUR 957.83 19 Net payment in Euro (6% Loan) EUR 23,435.61 EUR 23,826.45 EUR 24,240.74 EUR 24,679.89 EUR 25,145.39 20 21 Loan Payments in Euro (2%) EUR 22,913.11 EUR 22,913.11 EUR 22,913.11 EUR 22,913.11 EUR 22,913.11 22 Interest Payment (Before tax) EUR 2,160.00 EUR 1,701.74 EUR 1,320.71 EUR 888.86 EUR 448.38 23 Principal Repayment EUR 20,753.11 EUR 21,211.37 EUR 21,592.40 EUR 22,024.24 EUR 22,464.73 24 Interest Payment (After tax) EUR 1,425.60 EUR 1,123.15 EUR 871.67 EUR 586.65 EUR 295.93 25 Net payment in Euro (2% Loan) EUR 22,178.71 EUR 22,334.52 EUR 22,464.06 EUR 22,610.89 EUR 22,760.66 26 Financing Savings (in Euro) EUR 8,979.24 EUR 1,256.90 EUR 1,491.94 EUR 1,776.68 EUR 2,069.00 EUR 2,384.73 28 29 Expected Future exchange rate (R$/Euro) 4.2 30 Financing Savings (in R$) 31 32 Present Value of Savings in R$ (@6%) Answer #8 33 0O N U BWN = Table 2: Value of cheap financing (in R$000) (Assuming 3P Turbo entered into a currency swap agreement at 4.2 $R/Euro) Cost of equipment (Euro) Cost of equipment (R$) Spot Exchange Rate (R$/Euro) Value of Loan (90% of Cost, Euro Loan Payments in Euro (6%) Interest Payment (Before tax) Principal Repayment Interest Payment (After tax) Net payment in Euro (6% Loan) Loan Payments in Euro (2%) Interest Payment (Before tax) Principal Repayment Interest Payment (After tax) Net payment in Euro (2% Loan) Financing Savings (in Euro) Financing Savings (in RS) Present Value of Savings in RS (@6%) 120,000 Loan Rate from German Bank 504,000 Loan Rate from German Vendor 4.2 Swap Exchange Rate (R$/Euro) 108,000.00 Tax rate 0 1 2 3 4 5 Now 2017 2018 2019 2020 2021 [ 1

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