NPV & IRR from the Perspective of the Subsidiary Assignment | Homework For You

andelay Corporation expanding its business in Singapore but is considering an additional plant there. The following information has been gathered to assess this project:Homework For You

Don't use plagiarized sources. Get Your Assignment on
NPV & IRR from the Perspective of the Subsidiary Assignment | Homework For You
Just from $13/Page
Order Now
  • The initial investment required is SGD 5.9 million. The current spot rate is .73 USD/SGD. Inflation is US is projected to be 2% and in Singapore it is projected to be 4% for next 5 years.
  • The project will be terminated at the end of Year 5, when the subsidiary will be sold.
  • Vandelay is planning to finance the project by combination of debt and equity investment from the parent company. The equity financing is 66% entirely coming from the parent company Vandelay USA. The subsidiary is planning to take two loans. The local debt (SGD denominated) is 16.94% and USD debt is 17.06% for the project. The local and USD debt will be paid in 5 years. All the scheduled payments are priced at current spot rate. With the depreciation in SGD, this might raises FX gains and losses on the total loan payment. The interest rate for US-denominated loan is 5% and the interest rate for SGD denominated is 7%.
  • Assuming integrated capital market, the risk free rate in the US is 3%, the equity risk premium is 5% and beta of the project is 0.90.
  • Project manager expects the price per unit will remain constant for next five years at SGD 25. It is also expected the project will run 40% capacity in year 1, 50% in year 2, 80% in year 3, and 100% for year 4 and 5. The maximum plant capacity is 1,000,000 units per year.
  • The variable costs will increase by rate of inflation in Singapore 4% every year. The variable costs for the first year is SGD 10.
  • The sales and general expenses are expected to be 6% of the total sales.
  • The investment in Plant and equipment is SGD 2 million. It will be fully depreciate in 5 years.
  • The Singapore government will impose an income tax of 20% on income. In addition, Singapore also imposes 10% withholding tax on foreign dividend payment, 5% on interest payment and terminal value of the project. The US corporate tax rate is 35%.
  • The subsidiary in Singapore keeps 50% of net income and send remaining 50% to the parent company every year.
  • The net changes to operating working capital for subsidiary is 4% of sales revenue.
  • The project will be terminated in Year 5. The terminal value of the project is the present value of perpetual free cash flow in the 5th year. The growth rate in cash flow is assumed to be zero. The terminal value is subject to withholding tax.
  1. Estimate WACC for the project.
  2. Calculate the NPV & IRR from the perspective of the subsidiary.
  1. Calculate the NPV & IRR from the perspective of the parent.

Should Vandelay accept this project? If not explain what could the parent company do?Get Finance homework help today

Calculate your paper price
Pages (550 words)
Approximate price: -

Why Choose Us

Quality Papers

At, we always aim at 100% customer satisfaction. As such, we never compromise the quality of our essay services. Our essay helpers ensure that they craft each paper carefully to match the requirements in the instruction form.

Professional Academic Writers

With, every student is guaranteed high-quality, professionally written papers. We ensure that we hire individuals with high academic qualifications who can maintain our quality policy. These writers undergo further training to sharpen their writing skills, making them more competent in writing academic papers.

Affordable Prices

Our company maintains a fair pricing system for all paper writing services to ensure affordability. Our pricing system generates quotations based on the properties of individual papers.

On-Time delivery

MyHomeworkWriters guarantees all students of swift delivery of papers. We understand that time is an essential factor in the academic world. Therefore, we ensure that we deliver the paper on or before the agreed date to give students ample time for reviewing.

100% Originality maintains a zero-plagiarism policy. As such, MyHomeworkWriters ensure that they use the students’ instructions to deliver plagiarism-free papers. We are very keen on avoiding any chance of similarities with previous papers.

Customer Support 24/7

Our customer support works around the clock to provide students with assistance or guidance at any time of the day. Students can always communicate with us through our live chat system or our email and receive instant responses. Feel free to contact us via the Chat window or support email:

Try it now!

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Samples

Our writers complete papers strictly according to your instructions and needs, no matter what university, college, or high school you study in.

All samples
Analysis (any type)
Argumentative essays
Dissertation/Dissertation chapter
Analysis (any type)
Advantages and disadvantages of lowering the voting age to thirteen
Undergrad. (yrs 1-2)
Political science
View this sample
Argumentative essays
Is euthanasia ethical or not?
Undergrad. (yrs 3-4)
View this sample
Dissertation/Dissertation chapter
Videoconferencing as a teaching tool
Undergrad. (yrs 3-4)
View this sample

Our Essay Writing Services

MyHomeworkWriters holds a reputation for being a platform that provides high-quality academic services. All you need to do is provide us with all the necessary requirements and wait for quality results.


Essay Writing Services

At MyHomeworkWriters, we have highly qualified academic gurus who will offer great assistance towards completing your essays. Our essay help service providers are well-versed with all the aspects of developing high-quality and relevant essays.


Admission and Business Papers

With, we will help you secure a position at your desired institution. Our essay writing services include the crafting of admissions papers. We will still help you climb your career ladder by helping you write the official papers that will help you secure a job. We will guide you on how to write an outstanding portfolio or resume.


Editing and Proofreading has a professional editorial team that will help you organize your paper, paraphrase it, and eliminate any possible mistakes. Also, we will help you check on plagiarism to ensure that your final paper posses quality and originality.


Technical papers

My Homework Writers harbors professional academic writers from diverse academic disciplines. As such, we can develop essay help services in all academic areas. The simplicity or complexity of the paper does not affect the quality of essay writing services.

Sitemap: User-agent: * Allow: / User-agent: AhrefsBot Crawl-Delay: 1 User-agent: SemrushBot Crawl-Delay: 1