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
Chapter22: International Financial Management
Section: Chapter Questions
Problem 4P
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![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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd0a8184b-7207-48b7-81e2-a65167cb06c6%2Fa2d92696-09ca-40d9-9b60-adf6f9ba2196%2Ftc9mpks_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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?
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