Question: Carpet Baggers, Inc., is proposing to construct a new bagging plant in a country in Europe. The two prime candidates are Germany and Switzerland. The
Carpet Baggers, Inc., is proposing to construct a new bagging plant in a country in Europe. The two prime candidates are Germany and Switzerland. The forecasted cash flows from the proposed plants are as follows: C0 C1 C2 C3 C4 C5 C6 IRR(%) Germany (millions of euros) -78 +28 +33 +33 +38 +38 +38 35.3 Switzerland (millions of Swiss francs) -121 +37 +47 +47 +31 +31 +49 24.4 The spot exchange rate for euros is $1.48/, while the rate for Swiss francs is SFr1.68/$. The interest rate is 7% in the United States, 6% in Switzerland, and 8% in the euro countries. The financial manager has suggested that, if the cash flows were stated in dollars, a return in excess of 9% would be acceptable. Calculate the NPV in dollars for the German plant. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
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