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| Teaching Since: | May 2017 |
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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Capital Budgeting The Dutch firm ABS Equipment has an investment opportunity in the United Kingdom. The project costs £12 million, and is expected to produce cash flows of £2.7 million in year 1, £3.5 million in year 2, and £3.3 million in year 3. The current spot exchange rate is €1.12/£ and the current risk-free rate in the Eurozone is 2.12 per cent, compared with that in the United Kingdom of 2.13 per cent. The appropriate discount rate for the project is estimated to be 13 per cent, the Eurozone cost of capital for the company. In addition, the subsidiary can be sold at the end of three years for an estimated £7.4 million. What is the NPV of the project?
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