GM is considering purchasing a electrical components plant located in Hungary. All sales will be to Hungarian customers and denominated in forints. The projected investment and returns are as follows: - Purchase price: 30 billion forints - Additional investment required: 50 million USD. All imported equipment priced in USD. - Projected Hungarian sales: 45 billion forints - Projected earnings 4.5 billion forints. Exchange rate: 300 forints/USD A. What is the total investment (in dollars)? a) 10 million b) 100 million c) 90 million d) 150 million B. Once the plant is up and running, what is the annual percentage return on investment? a) 10% b) 15% c) 5.6% C. If the forint is devalued by 25%., what would the new exchange rate be? a) 375HF/$ b) 400HF/$ c) 225 d) 240HF/$ D. If this 25% devaluation was made after the purchase and additional investments were completed, what would the new ROI be? a) 7.5% b) 12.5% c) 11.25% d) 18.75% E. Instead of selling to the Hungarian market, assume that all sales were exports priced in hard currency, and yielding the same 4.5 billion forint earnings (at the original 300 forint/USD exchange rate). If the 25% devaluation described in questions C and D occurred, what would happen to the plant's profit margins? a) they would rise by aboui 25% b) they would fall by about 25% c) they rise by more than 25% d) they vould call by less than 25% GM is considering purchasing a electrical components plant located in Hungary. All sales will be to Hungarian customers and denominated in forints. The projected investment and returns are as follows: - Purchase price: 30 billion forints - Additional investment required: 50 million USD. All imported equipment priced in USD. - Projected Hungarian sales: 45 billion forints - Projected earnings 4.5 billion forints. Exchange rate: 300 forints/USD A. What is the total investment (in dollars)? a) 10 million b) 100 million c) 90 million d) 150 million B. Once the plant is up and running, what is the annual percentage return on investment? a) 10% b) 15% c) 5.6% C. If the forint is devalued by 25%., what would the new exchange rate be? a) 375HF/$ b) 400HF/$ c) 225 d) 240HF/$ D. If this 25% devaluation was made after the purchase and additional investments were completed, what would the new ROI be? a) 7.5% b) 12.5% c) 11.25% d) 18.75% E. Instead of selling to the Hungarian market, assume that all sales were exports priced in hard currency, and yielding the same 4.5 billion forint earnings (at the original 300 forint/USD exchange rate). If the 25% devaluation described in questions C and D occurred, what would happen to the plant's profit margins? a) they would rise by aboui 25% b) they would fall by about 25% c) they rise by more than 25% d) they vould call by less than 25%