Page 46 - Demo

%u062c%u0645%u064a%u0639 %u0627%u0644%u062d%u0642%u0648%u0642 %u0645%u062d%u0641%u0648%u0638%u0629 %u0640 %u0627%u0625%u0644%u0639%u062a%u062f%u0627%u0621 %u0639%u0649%u0644 %u062d%u0642 %u0627%u0645%u0644%u0624%u0644%u0641 46 %u0628%u0627%u0644%u0646%u0633%u062e %u0623%u0648 %u0627%u0644%u0637%u0628%u0627%u0639%u0629 %u064a%u0639%u0631%u0636 %u0641%u0627%u0639%u0644%u0647 %u0644%u0644%u0645%u0633%u0627%u0626%u0644%u0629 %u0627%u0644%u0642%u0627%u0646%u0648%u0646%u064a%u0629- Finance opportunity from the Parent Firm%u2019s Perspective:%uf06c Example 2 17:Zeda, Inc., a U.S. MNC, is considering making a fixed direct investment in Denmark. The Danish government has offered Zeda a loan of DKK 15,000,000 at a rate of 4 percent per annum. The normal borrowing rate for the Zeda is 6 percent in dollars and 5.5 percent in Danish krone. The load schedule calls for the principal to be repaid in three equal annual instalments. What is the present value of the benefit of the loan? The current spot rate is DKK 5.6 /$1.00, and the expected inflation rate is 3 percent in the U.S. and 2.5 percent in Denmark.Answer:%uf06c To calculate the exchange rate:exchange rate for year 1= 5.6(1+0.025) = 5.57 DDK/$(1+0.03)exchange rate for year 2 = 5.6(1+0.025)2= 5.55 DDK/$(1+0.03)2exchange rate for year 3 =5.6(1+0.025)3(1+0.03)3 = 5.52 DDK/$%uf06c To calculate the Interest values for the years: Interest Value year 1= 15M * 4% = 600,000 DDK Interest Value year 2= 10M * 4% =400,000Interest Value year 3= 5M * 4% = 200,000Years Exchange rate (A)Instalments (B)Interest (C)(B + C) /A PV1 5.57 5000,000 600,000 1,005386 948,4772 5.55 5000,000 400,000 972,973 865,9433 5.52 5000,000 200,000 942,029 790,94617 --Eun, C. S., & Resnick, B. G. (2012). International financial, edition Six, McGraw Hill.