For use in problem # 9, 10, 11, and 12 An Indian pharma company is considering a project in Australia. The initial investment is will be AUD 150 MM plus necessary working capital of AUD 20 MM. The fixed asset will be depreciated down to zero over the 3 years life of the project and is expected that it could be sold (salvage value) for AUD 75 MM. The project will generate operating cash flows of AUD 40 MM (including the depreciation of investment) each year. All cash flows, operating and terminal value) are after tax. Other information available:

INDIA AUSTRALIA INFLATION RATE 3.50% 2.00% WACC 10.50% ? FX Spot Rate INR 50.00 / AUD AUD 0.0200 / INR

9. What is the projects NPV in AUD? A. AUD 249.89 B. AUD 25.00 C. AUD 5.00 D. (AUD 10.49) INDIA AUSTRALIA INFLATION RATE 3.50% 2.00% WACC 10.50% ? FX Spot Rate INR 50.00 / AUD AUD 0.0200 / INR