XJ Company from the USA Is Evaluating a Proposal to Build

question 30

Multiple Choice

XJ Company from the USA is evaluating a proposal to build a new plant in the United Kingdom. The expected cash flows in pounds are as follows: Year 0, -50; Year 1, 25; Year 2, 35; Year 3, 40. The discount rate in BP is 14% and the discount rate in the US$ is 12%. The spot rate is US$1.99/BP. Calculate the NPV of the project in BP:

• A) +28.69
• B) +25.86
• C) +42.67
• D) None of the above

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Definitions:

Quality

The degree to which a product, service, or process meets specified standards or user expectations, often associated with excellence or superiority.

Products/Services

Goods manufactured or actions provided by a company for sale to consumers.

Job Enlargement

Increasing the diversity and number of tasks involved in a job to enhance its complexity and the worker's involvement and satisfaction.

Skill Variety

An aspect of job design that involves the degree to which a job requires a range of different skills and talents.