The research department of a large financial institution provided inflation expectations for the next five years. According
Question:
The research department of a large financial institution provided inflation expectations for the next five years. According to the forecasts, UK will have 1.75% more inflation than France and 3.5% higher inflation than South Korea. On the basis of this new evidence, would you consider your proposal with regard to financing the Korean factory? Explain your answer. Please show workings so I can understand where the inflations are added. Thankyou in advance.
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| year | year | year | year | year | year | total payments |
|
| 0 | 1 | 2 | 3 | 4 | 5 |
|
initial investments (KRW) |
| ₩200,000.00 |
|
|
|
|
|
|
interest rate in uk (5-year loan) |
| 0.09 |
|
|
|
|
|
|
interest rate in south korea (5-year loan) |
| 0.15 |
|
|
|
|
|
|
interest rate in france (5-year loan) |
| 0.12 |
|
|
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|
|
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|
|
exchange rate: KRW per GBP | 4% per annum | ₩2,000.00 | ₩2,000.00 | ₩2,080.00 | ₩2,163.20 | ₩2,249.73 | ₩2,339.72 | ₩2,433.31 |
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forecasted exchange rate: EUR per GBP | 3% per annum | € 1.18 | € 1.18 | € 1.22 | € 1.26 | € 1.30 | € 1.34 | € 1.38 |
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korean debt in millions KRW | IR 0.15 | ₩200,000.00 | ₩200,000.00 | ₩230,000.00 | ₩264,500.00 | ₩304,175.00 | ₩349,801.25 | ₩402,271.44 |
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UK debt in millions GBP | IR 0.09 | £ 100.00 | £ 100.00 | £ 109.00 | £ 118.81 | £ 129.50 | £ 141.16 | £ 153.86 |
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French debt in millions EUR | IR 0.12 | € 118.00 | € 118.00 | € 132.16 | € 148.02 | € 165.78 | € 185.67 | € 207.95 |
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GBP converted to KRW |
|
| ₩218,000.00 | ₩237,620.00 | ₩259,000.00 | ₩282,320.00 | ₩307,720.00 | ₩307,720.00 |
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EUR converted to KRW |
|
| ₩264,320.00 | ₩296,040.00 | ₩331,560.00 | ₩371,340.00 | ₩415,900.00 | ₩415,900.00 |
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Marketing Research
ISBN: 9781119497639
13th Edition
Authors: V. Kumar, Robert P. Leone, David A. Aaker, George S. Day