Question

Redy Tody, an Indian- based pharmaceutical firm, is considering a project in Canada. The following table lists foreign currency (CAD) cash flows. The CAD is currently trading at CADINR equals 50. Assume that future spot rates are equal to the current spot rate. The WACC of the firm is 11 percent.
Year                       Cash Flows (CAD)
0                           -200,000
1– 4                       50,000
5                            100,000
Calculate the NPV of the project in INR.

Answer 1

Ans $ 14467.42

Year	Project Cash Flows (i)	DF@ 11%	DF@ 11% (ii)	PV of Project A ( (i) * (ii) )
0	-200000	1	1	(2,00,000.00)
1	50000	1/((1+11%)^1)	0.901	45,045.05
2	50000	1/((1+11%)^2)	0.812	40,581.12
3	50000	1/((1+11%)^3)	0.731	36,559.57
4	50000	1/((1+11%)^4)	0.659	32,936.55
5	100000	1/((1+11%)^5)	0.593	59,345.13
		TOTAL		14,467.42