A developing country has determined that each additional​ $1 billion of investment in capital goods adds 0.3 percentage point to its​ long-run average annual rate of growth of per capita real GDP. Domestic entrepreneurs recently began to seek official approval to open a range of businesses employing capital resources valued at ​$27 billion. If the entrepreneurs undertake these​ investments, and assuming that other things are​ equal, calculate the​ nation's long-run average annual rate of growth of per capita real GDP up to a fraction of a percentage point.   nothing percent.  ​(Round your answer t

Carambola de Honduras. Slinger Wayne, a U.S.-based private equity firm, is trying to determine what it should pay for a tool manufacturing firm in Honduras named Carambola. Slinger Wayne estimates that Carambola will generate a free cash flow of 12 million Honduran lempiras (Lp) next year, and that this free cash flow will continue to grow at a constant rate of 7.0% per annum indefinitely. A private equity firm like Slinger Wayne, however, is not interested in owning a company for long, and plans to sell Carambola at the end of three years for approximately 10 times Carambola's free cash flow in that year. The current spot exchange rate is Lp15.8194/$, but the Honduran inflation rate is expected to remain at a relatively high rate of 15.0% per annum compared to the U.S. dollar inflation rate of only 2.5% per annum. Slinger Wayne expects to earn at least a 21% annual rate of return on international investments like Carambola. a. What is Carambola worth if the Honduran lempira were to…

A company is considering two mutually exclusive expansion plans. Plan A requires a $41 million expenditure on a large-scale integrated plant that would provide expected cash flows of $6.55 million per year for 20 years. Plan B requires a $13 million expenditure to build a somewhat. less efficient, more labor-intensive plant with an expected cash flow of $2.91 million per year for 20 years. The firm's WACC is 10%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Open spreadsheet a. Calculate each project's NPV. Round your answers to two decimal places. Do not round your intermediate calculations. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Plan A: $ Plan B: $ million Calculate each project's IRR. Round your answer to two decimal places. Plan A: Plan B: % % million % b. By graphing the NPV profiles for Plan A and Plan B,…

You are International Business Manager at a UK based company. Considering high demand your company plans a full-scale expansion. Your company has identified USA and Europe as potential markets. You are requested to analyse both projects and advise. In considering such large project, you must work out the risk of each project, cost of capital and NPV. Allocate discount rate for each project accordingly and justify why you allocated this rate in your discussion. Discuss how international risks can be managed.   Projected cash flows in respective currencies: Year    Net Cash Flow – USD USA    Net Cash Flow - EUR Europe0    -20 million    -20 million 1    2 million    2 million2    4 million    3 million3    5 million    4 million4    6 million    8 million5    8 million    8 million Instructions:a.    Discuss viability of both projects in today’s global business context and allocate discount rate. b.    How much investment is needed for each project and what is the NPV of each project? c.…

A retail coffee company is planning to open 110 new coffee outlets that are expected to generate $15.9 million in free cash flows per year, with a growth rate of 3.5% in perpetuity. If the coffee company's WACC is 9.5%, what is the NPV of this expansion? The present value of the free cash flows is $ million. (Round to two decimal places.)

A company is considering two mutually exclusive expansion plans. Plan A requires a $40 million expenditure on a large-scale integrated plant that would provide expected cash flows of $6.39 million per year for 20 years. Plan B requires a $15 million expenditure to build a somewhat less efficient, more labor-intensive plant with an expected cash flow of $3.36 million per year for 20 years. The firm's WACC is 9%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the questions below. Calculate each project's NPV. Round your answers to two decimal places. Do not round your intermediate calculations. Enter your answers in millions. For example, an answer of $10,550,000 should be entered as 10.55. Plan A: $ fill in the blank million Plan B: $ fill in the blank million Calculate each project's IRR. Round your answer to two decimal places. Plan A: fill in the blank Plan B: fill in the blank By graphing…

Carambola de Honduras. Slinger Wayne, a U.S.-based private equity firm, is trying to determine what it should pay for a tool manufacturing firm in Honduras named Carambola. Slinger Wayne estimates that Carambola will generate a free cash flow of 10 million Honduran lempiras (Lp) next year, and that this free cash flow will continue to grow at a constant rate of 8.5% per annum indefinitely. A private equity firm like Slinger Wayne, however, is not interested in owning a company for long, and plans to sell Carambola at the end of three years for approximately 10 times Carambola's free cash flow in that year. The current spot exchange rate is Lp14.3439/$, but the Honduran inflation rate is expected to remain at a relatively high rate of 15.0% per annum compared to the U.S. dollar inflation rate of only 3.0% per annum. Slinger Wayne expects to earn at least a 22.5% annual rate of return on international investments like Carambola. a. What is Carambola worth if the Honduran lempira were to…