Pepsi-Cola is planning on opening a subsidiary in India. The subsidiary will cost Rupees 1 billion; working capital needs of the subsidiary include an increase in inventories of Rupees 200 million, and increase in accounts payables to the tune of Rs. 300 million. The revenues from the subsidiary are estimated to be Rupees 800 million per year over a 5-year economic life. Depreciation expense after accounting for the savage value of Rs. 200 million will be Rupees 160 million/year. Total costs (fixed and variable costs together) will be Rupees 250 million/year. The plant will have a salvage value of Rupees 200 million (net of taxes) in the terminal year. Indian government imposes a 30% tax on earnings. 100% of the cash flows will be remitted to the parent. However, there will be a 10% withholding tax by the Indian Govt. Pepsi-Cola requires 16% return on new investments of this kind in developing countries. The exchange rate is expected to be stable at Rupees 66/$. a) Calculate the net investment cost (US $) of the subsidiary.
b) Calculate after-tax cash flows in US $ for years 1 through 5
c) Calculate the Net Present Value (NPV) of the project.
d) Calculate the IRR of the project
e) Should the project be accepted or rejected?
f) Now, recalculate the NPV & decide whether the project should be accepted or rejected under the following scenarios:
i) Strong Rupee: Rs. 60/ US $
ii) Weak Rupee: Rs. 70/ US $

Gino's restaurant is a popular restaurant in boston, massachusetts. the owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based costing study. the intern, in consultation with the owner, identified the following major activities: activity cost pool activity measure serving a party of diners number of parties served serving a diner number of diners served serving drinks number of drinks ordered some costs, such as the cost of cleaning the linens that cover the restaurant's tables, vary with the number of parties served. other costs, such as washing plates and glasses, depends on the number of diners served or the number of drinks served. data concerning these activities are shown below. serving a party serving a dinner serving drinks total total cost $47,600 $153,000 $59,800 $260,400 total activity 7,000 parties 30,000 diners 46,000 drinks prior to the activity-based costing study, the owner knew very little about the costs of the restaurant. she knew that the total cost for the month was $260,400 and that 30,000 diners had been served. therefore, the average cost per diner was $8.68.required: 1. compute the activity rates for each of the three activities 2. according to the activity-based costing system, what is the total cost of serving each of the following parties of diners? a. a party of four diners who ordered three drinks in total b. a party of two diners who do not order any drinks c. a lone diner who orders two drinks 3. convert the total costs you computed in part (1) above to costs per diner. in other words, what is the average cost per diner for serving each of the following parties: a. a party of four diners who order three drinks in total b. a party of two diner who do not order any drinks c. a lone diner who orders two drinks 4. why do the costs per diner for the three different parties differ from each other and from the overall average coast of $9.80 per diner?

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You own 2,200 shares of deltona hardware. the company has stated that it plans on issuing a dividend of $0.42 a share at the end of this year and then issuing a final liquidating dividend of $2.90 a share at the end of next year. your required rate of return on this security is 16 percent. ignoring taxes, what is the value of one share of this stock to you today?