Your next option in your project is building the plant in China, but exporting the product back to the U.S. for sale.
Construct a table in Excel and calculate the NPV of a plant in China that exports product to the U.S. market. Start with your NPV spreadsheets from the last two weeks, and add the following adjustments:
1. The current exchange rate is that used in Week-3/1 USD.
2. Transportation from your China plant to the U.S. is $1/UNIT
3. The current tariff on apparel imports is 15% of value
4. The finished goods are transferred into the U.S. at a value of 50% over variable cost
5. Assume the discount rate, tax rate and depreciation are taken as the U.S. project in Week-2
Calculate the following:
• Project NPV in USD
• Project NPV if the exchange rate changes by +/-20%, and by +/-70%