XJ Company from the U

question 56

Multiple Choice

XJ Company from the U.S.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 $US is 12%.The spot rate is $US1.99/BP.Calculate the NPV of the project in BP.

• A)+28.69
• B)+25.86
• C)+42.67
• D)+22.68

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Definitions:

New England

A region in the northeastern United States comprising six states (Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont), known for its colonial history, distinct seasons, and academic institutions.

Sugar Planters

Landowners or managers of estates primarily engaged in the cultivation of sugarcane, historically known for labor-intensive practices and heavy reliance on enslaved or indentured workforces.

Caribbean

A region that consists of the Caribbean Sea, its islands (including the West Indies), and the surrounding coasts, known for its rich cultural diversity and history of colonialism.

New England

A region in the northeastern corner of the USA, comprising six states: Maine, Vermont, New Hampshire, Massachusetts, Rhode Island, and Connecticut.