3P Turbo Cross Border Investment in Brazil Case Study Analysis
Make the assumptions that the business has sufficient cash flow and existing capital, or sometimes acts as an investor. In addition, the company has decided to make resources available, in order to make the acquired equipment competitive in Brazil. We can assume that if the company decides to buy equipment; it will finance itself. In this way, you can dramatically increase the NPV of your project to 83,556, as shown in the Graph 4 below. Therefore, it can be estimated that, based on the above assumptions; self-financing takes precedence over other analyses, as it results in the highest NPV.
It is estimated that if the exchange rate is expected to increase in 2018 and 2021; the relative selling price of the unit as well as its production, sales and handling costs will also increase in those years. Of these, relative costs will increase by 19% in 2018 and 2021, and by 29% and 29%, respectively. However, we assume that prices and costs will remain unchanged in 2017 and the years 2018 and 2021 will be exaggerated. Therefore, it can be estimated that the change in the expected exchange rate and assumptions can be converted to 108,787 by auxiliary analysis, as shown in the Excel figure in the following figure. Therefore, it can be determined that the analysed net present value of the restructured subsidiary will be significantly higher than the matrix analysis, attributable to the increase in unit production prices. However, it can be estimated that in case of a change in the exchange rate; an additional analysis is chosen, because it allows the production of the highest NPV value.............................
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