Week 29 Seminar Question; Blo Inc. is a company based in the USA.

Blo Inc. is a company based in the USA. It is considering a project investment in the UK comprising the acquisition of new machinery which it hopes will increase its profits.

Week 29 Seminar Question


Don't use plagiarized sources. Get Your Custom Essay on
Week 29 Seminar Question; Blo Inc. is a company based in the USA.
Just from $13/Page
Order Essay

Blo Inc. is a company based in the USA. It is considering a project investment in the UK comprising the acquisition of new machinery which it hopes will increase its profits.

The initial investment in the machinery would be £10 million immediately and the project is expected to last for four years.

Sales would increase by £3 million per annum in current terms. Sales prices are expected to rise by 5% per annum.

Purchases of raw materials and labour are expected to be £1 million each in current terms, but expected to rise by 3% and 2% respectively.

Investment in machinery receives tax allowable depreciation of 25% per annum. Allowances are receivable one year in arrears.

The machinery will be sold at the end of the project for £4 million, in year 4 prices.

Corporation tax in the UK is 30% and in the US is 25%. Corporation tax is payable in the following year in both countries.

The project will require an injection of working capital immediately of £2 million and will be released at the end of the project. The working capital requirement is expected to rise by 1% per annum.

The real cost of capital of Blox Inc. is 10%

General inflation in the UK is predicted to be 2% per annum, and in the US 4%, throughout the duration of the project.

The current spot rate for the £ to the $ is £1 = $1.505.



(i)  Calculate the annual discounted cash flows in $ millions, using the nominal rate method.

(ii) State the net present value of the project and whether you recommend for the project to commence.




Note: In this question you are given the real cost of capital, you have to calculate the nominal cost of capital.

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Home Work Stand
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Allows consistent with great work and following the instructions. Thank you for all your hard work!
Customer 452445, December 14th, 2021
Very professional and easy to work with. I highly recommend!
Customer 452445, December 12th, 2021
Business Studies
Remarkable work!! Always helpful and amazing communication!!
Customer 452445, January 4th, 2022
Human Resources Management (HRM)
Awesome work! Writer articulates points well which makes it easy to read the essay!
Customer 452445, December 15th, 2021
Classic English Literature
Great detailed work, I am very happy with the result of this writer's work. Thank you so much for delivering my paper perfectly and way before the due date.
Customer 452445, January 19th, 2022
Business Studies
Amazing job on a tight deadline. Met all requirements and some. Will hire again if needed.
Customer 452445, March 3rd, 2022
Criminal law
I got an A. I recommend homeworkstand.
Customer 452445, October 31st, 2021
Computer science
Great individual to work with. Always come through to provide the best services. Thank you.
Customer 452445, June 10th, 2022
Classic English Literature
Great work and delivered on time. thank you.
Customer 452445, October 30th, 2021
Health Care
Great work, met all the requirements, and followed all instructions perfectly!
Customer 452445, December 20th, 2021
Human Resources Management (HRM)
Writer was cooperative and got me an A on my paper.
Customer 452445, December 20th, 2021
Social Sciences
The formatting was not okay but the paper was great.
Customer 452445, November 2nd, 2021
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat

Order your essay today and save 15% with the discount code ESSAYHELP