A plant of production capacity of 20,000 metric tons/year cost about U.S. $50 million 10 years ago in Mexico. The same manufacturer wishes to invest in Malaysia for a plant of 45,000 metric tons/year. What is the projected cost in $U.S. if inflation rate in Mexico can be assumed to be at 3% per annum and the ratio of cost index between Mexico and Malaysia is Cost Mx/Cost My = 0.75? %3D

A plant of production capacity of 20,000 metric tons/year cost about U.S. $50 million 10 years ago in Mexico. The same manufacturer wishes to invest in Malaysia for a plant of 45,000 metric tons/year. What is the projected cost in $U.S. if inflation rate in Mexico can be assumed to be at 3% per annum and the ratio of cost index between Mexico and Malaysia is Cost Mx/Cost My = 0.75? %3D

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter22: International Financial Management

Section: Chapter Questions

Problem 4P

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