Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. i am having problems filling in the blanks for par

I am having problems filling in the blanks for Parent Company Perspective (in U.S. Dollars)...

60.1K

Verified Solution

Question

Finance

I am having problems filling in the blanks for Parent Company Perspective (in U.S. Dollars) in Yellow for years 2,3 & 4. The calculation must be what the present value is (instructor provided the total) Case 10-1 Felix Machine Company

Parent Company Perspective (in U.S. dollars)
Year 1 Year 2 Year 3 Year 4 Total
Exchange Rate Rs 45 43 40 38
Royalties (Rs 20,000,000) $444,444 $465,116 $500,000 $526,316
Less: U.S. income tax (21%) -93,333 ($97,674) ($105,000) ($110,526)
Royalties (after tax) $351,111 $367,442 $395,000 $415,789
Dividends (Earnings) 0
Terminal value * 0 **
Total cash flow to parent $351,111 $367,442 $395,000 415,789
Present value factors (16%) x 0.862 0.743 0.641 0.552 _______
Present value $302,658 $288,647 $611,328 $1,469,637 $2,672,270
Less: Initial investment -1,500,000
Net present value (in U.S. $) $1,172,270

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students