| You are reviewing the purchase of a machine in your subsidiary in Europe that costs...
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| You are reviewing the purchase of a machine in your subsidiary in Europe that costs 6 million Euros. It will have a 3-year life and a salvage value of 3 million Euros. The cash flows from the machine are as follows: Year 1: +1,250,000 Euros, Year 2: + 1,500,000 Euros, and Year 3: + 2,000,000 Euros. The current exchange rate is $1.3 Cdn per 1 Euro and the company's discount rate is 12%. If the interest rate is 2.5% in Canada and 2.0% in Europe, what is the NPV of this investment? -$147,878 +$227,276 -$253,676 +$175,567 O-$77,246 | You are reviewing the purchase of a machine in your subsidiary in Europe that costs 6 million Euros. It will have a 3-year life and a salvage value of 3 million Euros. The cash flows from the machine are as follows: Year 1: +1,250,000 Euros, Year 2: + 1,500,000 Euros, and Year 3: + 2,000,000 Euros. The current exchange rate is $1.3 Cdn per 1 Euro and the company's discount rate is 12%. If the interest rate is 2.5% in Canada and 2.0% in Europe, what is the NPV of this investment? -$147,878 +$227,276 -$253,676 +$175,567 O-$77,246
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The NPV of this investment is 147878 The discount rate ... View the full answer
Related Book For
Corporate Finance A Focused Approach
ISBN: 978-1439078082
4th Edition
Authors: Michael C. Ehrhardt, Eugene F. Brigham
Posted Date:
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