Mars Technologies is considering setting up a plant in a foreign country. The plant will have an
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Question:
Mars Technologies is considering setting up a plant in a foreign country. The plant will have an estimated useful life of 4 years and the estimated costs of setting it up are $20 million. The company's CFO has estimated the following cash flows associated with the new plant:
Year 1 = $5.8 million
Year 2 = $7.9 million
Year 3 = $8.6 million
Year 4 = $10.5 million
The company is concerned about its current exports to the foreign country, which are expected to be reduced by $1,200,000 for each of the 4 years. Given that the company's required rate of return is 12%, what is the NPV of the project?
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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