What discount rate would you use to discount the cash flows from the project? Does this adequately capture the risk of investing in Brazil?

1. Why would 3P Turbo consider investing in Brazil? What are the advantages and disadvantages to locating its operations in Brazil?

2. What discount rate would you use to discount the cash flows from the project? Does this adequately capture the risk of investing in Brazil?

3. Based on the five-year life of the project, does this project look attractive for 3P Turbo? Should Jason invest in Brazil at that time? Be prepared to support your answer financially, strategically, and considering Brazil’s political and business environments.