Suppose that Swiss pharma, Roche, is evaluating a proposal to build a new facility in the United States To calculate the projects net present value, Roche forecast the following dollar cash flows from the proposed project CASH FLOWS (in U S dollars) ($millions) C0 C1 C2 C3 C4 C5 1,300 400 450 510 575 650 The expected average cost of capital is 9 5 The spot rate of exchange of the Swiss Franc is 1 3 $ Determine the NPV in U S dollars and in Swiss Francs In the event your group is pessimistic about the outlook for the U S dollar, what actions might you take to protect your investment should you move forward with this project

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Question: Suppose that Swiss pharma, Roche, is evaluating a proposal to build a new facility in the United States. To calculate the projects net present value,

Suppose that Swiss pharma, Roche, is evaluating a proposal to build a new facility in the United States. To calculate the projects net present value, Roche forecast the following dollar cash flows from the proposed project:

CASH FLOWS (in U.S dollars) ($millions)

C0	C1	C2	C3	C4	C5
-1,300	400	450	510	575	650

The expected average cost of capital is 9.5%. The spot rate of exchange of the Swiss Franc is 1.3/$.

Determine the NPV in U.S. dollars and in Swiss Francs.

In the event your group is pessimistic about the outlook for the U.S dollar, what actions might you take to protect your investment should you move forward with this project?

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