How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask SteveS Your Own Question
SteveS, MBA
Category: Homework
Satisfied Customers: 453
Experience:  MBA from Top 5 US Business School, Tutoring Experience for Over Two Years
Type Your Homework Question Here...
SteveS is online now
A new question is answered every 9 seconds

13. Carpet Baggers, Inc., is proposing to construct a new bagging

This answer was rated:

13. Carpet Baggers, Inc., is proposing to construct a new bagging plant in a country in Europe.
The two prime candidates are Germany and Switzerland. The forecasted cash
flows from the proposed plants are as follows:

C0 C1 C2 C3 C4 C5 C6 IRR(%)
Germany -60 +10 +15 +15 +20 +20 +20 18.8
(millions of euros)

Switzerland -120 +20 +30 +35 +35 +35 +35 12.8
(millions of Swiss francs)

The spot exchange rate for euros is $1.3/k, while the rate for Swiss francs is SFr 1.5/$.
The interest rate is 5 percent in the United States, 4 percent in Switzerland, and 6 percent
in the euro countries. The financial manager has suggested that, if the cash flows
were stated in dollars, a return in excess of 10 percent would be acceptable.
Should the company go ahead with either project? If it must choose between them,
which should it take?

You need to spend $3 to view this post. Add Funds to your account and buy credits.
SteveS and other Homework Specialists are ready to help you
Customer: replied 6 years ago.
Thank you so much!! I did have that typo. Thanks for pointing it out and that it did not change the answer. I also appreciate your fast response time. Thanks again!!

Related Homework Questions