New bagging

Carpet Baggers Inc. is proposing to construct a new bagging plant in a country in Europe. The

two prime candidates are Germany and Switzerland. The forecasted cash flows from the

proposed plants are as follows:

(table see attached)

The spot exchange rate for euros is $1.3/€, while the rate for Swiss francs is CHF 1.5/$. The

interest rate is 5% in the United States, 4% in Switzerland, and 6% in the euro countries. The

financial manager has suggested that, if the cash flows were stated in dollars, a return in excess

of 10% would be acceptable.

Should the company go ahead with either project? If it must choose between them, which should

it take?

Please explain your answer in detail and provide in-text citations.

*********************

5 pages APA 7 format, 8 citations from textbook. similarity must blow 20%

  • attachment

    wk8cla2Solved_CarpetBaggersInc.isproposingtoconstructanewb…_Chegg.com.pdf
  • attachment

    wk8cla2table.jpg
  • attachment

    PrinciplesofCorporateFinance13ERichardBrealey.pdf