An Australian Firm Is Evaluating a Proposal to Build a New

question 20

Multiple Choice

An Australian firm is evaluating a proposal to build a new plant in the United States. The expected cash flows in $US (in millions) are as follows: Year 0, −100; Year 1, 40; Year 2, 50; Year 3, 65. The discount rate in $A is 10 percent, while the discount rate in $US is 12 percent and the spot rate is $US0.85/$A. Calculate the NPV in $A.

• A)+25.69
• B)−21.84
• C)+13.10
• D)+21.84

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Definitions:

Generalized Anxiety Disorder

is a mental health disorder characterized by persistent and excessive worry about various aspects of life, not limited to one specific issue.

Constantly "On Edge"

This term describes a state of being continually anxious, tense, or irritable.

Apprehensive

Feeling anxious or fearful about the future; uneasy.

Hallucinations

Perceptions in a conscious and awake state in the absence of external stimuli, which have qualities of real perception.