making a foreign capital expenditure in Switzerland. The
initial cost of the project is CHF22,000. The annual cash
flows over the seven year economic life of the project in CHF are
estimated to be: 4,000; 5,000; 6,000; 7000; 8,000; 9,000; and,
9700. The parent firm’s cost of capital in JPY is 7.5%.
Long-run inflation is forecasted to be 3.5% per annum in the JPY.
and 7.5% in Switzerland. The current spot foreign exchange
rate is CHF/JPY = 3.75.
Determine the NPV for the project in JPY.
- Will Smith Company A Japanese Jpy Mnc Is Contemplating Making A Foreign Capital Expenditure In Switzerland The Ini 1 (50.62 KiB) Viewed 32 times