Question: Assume that in the original Ityesi example in Table E all sales actually occur in the United States and are projected to be $59.3 million

Assume that in the original Ityesi example in Table E all

Assume that in the original Ityesi example in Table E all sales actually occur in the United States and are projected to be $59.3 million per year or four years. Keeping other costs the same, calculate the NPV of the investment opportunity. Assume the WACC is 6.3%. The forward exchange rates are given below. Year Forward Exchange Rate (/1.4618 1.6982 15435 1.3322 12962 Calcualte the cash flows below: (Round to three decimal places. Forward exchange rates must be rounded to four decimal 4 Data Table Year Free cash flow (millons of pounds) Forward exchange rate Free cash flow (mil ons of dollars) Sales in the US (millons of dollars) Cash flow (millons of dollars) TABLE 31.1 SPREADSHEET Expected Foreign Free Cash Flows from Ityesi's U.K. Project Year Incremental Earnings Forecast ( millions) 1 Sales 2 Cost of Goods Sold 3 Gross Profit 4 Operating Expenses 5 Depreciation 6 EBIT 7 Income tax at 40% 8 Unlevered Net Income Free Cash Flow 9 Plus: Depreciation 10 Less: Capital Expenditures 11 Less: Increases in NWC The NPV is Smilion (Round to three decimal places ) 37500 37500 37500 37500 (15625) (15625) (15625) (15625) -21.875 21.875 21.875 21.875 4.167 5.625) (5.625) 5.625) 5.625) - (3.750 (3.750) (3.750) (3.750) 4.167) 2.500 12.500 12.500 12.500 1.667 5.000) (5.000 (5.000) (5.000) 2.500 7500 7500 7500 7500 -3.750 3.750 3.750 3.750 ( 15.000) 12 Pound Free Cash Flow 17.500) 11.250 11.250 11.250 11.250 Enter any number in the edit fields and then continue to the next question. Save for Later

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