Y0 Y1

1. Units sold to entertainment products

2. Price per unit (Thai Baht)
3. Revenue from contractual agreement ( = 1x2) (Thai Baht)

4. Units sold to other retailers 120,000

5. Price per unit (Thai Baht) 5,000
6. Revenue from sales to other retailers (=4x5) (Thai Baht) 600000000
Total sales (=3+6) (Thai Baht) 600,000,000

8. Variable cost per unit (Thai Baht) 3500

9. Total variable cost (= (1+4)x8) (Thai Baht) 420000000
10. Cost saved from production of 108,000 pairs (Thai Baht) 32,400,000
11. Fixed Operating Expenses (Thai Baht) 25000000
12. Depreciation Expense (Thai Baht) 30,000,000
13. Total Expenses (=(9-10) + 11+ + 12) (Thai Baht) 442,600,000
14. Subsidiary's Earnings before Tax (7-13) (Thai Baht) 157,400,000
15. Host government tax (25%) 39,350,000
16. Subsidiary's Earnings After Tax (Thai Baht) 118,050,000
17. Cash flow of subsidiary (=16+12) (Thai Baht) 148,050,000

18. Remitted fund by subsidiary (100% of cash flow)(Thai Baht) 148,050,000

19. Withholding tax on remitted funds (10%) 14805000
20. Thai Baht remitted after withholding tax 133,245,000

21. Salvage value (Thai Baht)

22. Exchange rate of Thai Baht $0.02254
23. Cash flow in $ to Parent Company (= 20 x 22) $3,003,342
24. PV of cash flow (discount rate = 25%) 2402674
25. Initial investment $ (12,650,000)
NPV $ 2,638,735
If Blades renews the agreement with Entertainment Products, the NPV of the project is positive. Theref
 Y2 Y3 Y4 Y5 Y6
180,000 180,000 180,000 180,000 180,000
4,594 4,594 4,594 4,594 4,594
826920000 826920000 826920000 826920000 826920000

120,000 220,000 220,000 220,000 220,000

5600 6272 7025 7868 8812
672000000 1379840000 1545420800 1730871296 1938575851.52
1498920000 2206760000 2372340800 2557791296 2765495851.52

3920 4390 4917 5507 6168

1176000000 1756160000 1966899200 2202927104 2467278356.48

28,000,000 31360000 35123200 39337984 44058542

30,000,000 30000000 30000000 30000000 30000000
1,234,000,000 1,817,520,000 2,032,022,400 2,272,265,088 2,541,336,899
264,920,000 389,240,000 340,318,400 285,526,208 224,158,953
66,230,000 97,310,000 85,079,600 71,381,552 56,039,738
198,690,000 291,930,000 255,238,800 214,144,656 168,119,215
228,690,000 321,930,000 285,238,800 244,144,656 198,119,215

228,690,000 321,930,000 285,238,800 244,144,656 198,119,215

22869000 32193000 28523880 24414465.6 19811921.5
205,821,000 289,737,000 256,714,920 219,730,190 178,307,294

0.02209 0.02165 0.02121 0.02079 0.02037

$4,546,421 $6,272,057 $5,446,070 $4,568,230 $3,632,900
2909710 3211293 2230710 1496918 952343

roject is positive. Therefore, the projects should be accepted and Blades should establish a subsidiary in Thailand.
 Y7 Y8 Y9 Y10
180,000 180,000 180,000 180,000
4,594 4,594 4,594 4,594
826920000 826920000 826920000 826920000

220,000 220,000 220,000 220,000

9869 11053 12380 13865
2171204953.702 2431749548.147 2723559493.924 3050386633.1952
2998124953.702 3258669548.147 3550479493.924 3877306633.1952

6908 7737 8666 9706

2763351759.258 3094953970.369 3466348446.813 3882310260.4303

49345567 55267035 61899079 69326969

30000000 30000000 30000000 30000000
2,842,697,326 3,180,221,006 3,558,247,526 3,981,637,229
155,427,627 78,448,543 (7,768,032) (104,330,596)
38,856,907 19,612,136 (1,942,008) (26,082,649)
116,570,720 58,836,407 (5,826,024) (78,247,947)
146,570,720 88,836,407 24,173,976 (48,247,947)

146,570,720 88,836,407 24,173,976 -48,247,947

14657072 8883641 2417398 0
131,913,648 79,952,766 21,756,578 -48,247,947

650,000,000
0.01997 0.01957 0.01918 0.01879
$2,633,905 $1,564,480 $417,208 $11,308,530
552370 262476 55997 1,214,244

iland.