Score: 0 of 1 pt 7 of 7 (4 complete) HW Score: 30%, 2.1 of 7 pts P18-20 (similar to) Question Help Domestic NPV approach. Farbucks is thinking of expanding to South Korea. The current indirect rate for dollars and South Korean won is 997 won per dollar. The expected inflation rate in South Korea should hover near 0.8% for the next five years. The expected U.S. inflation rate should stay around 3.3%. The discount rate for expanding is 14% for Farbucks. Given the following projected cash flows for the expansion project, use the domestic NPV approach to determine whether Farbucks should expand to South Korea. Year 0: initial investment costs of 85,000,000 won per coffee shop Year 1 cash flow: 20,000,000 won Year 2 cash flow: 35,000,000 won Year 3 cash flow: 70,000,000 won Year 4 cash flow: 85,000,000 won Year 5 cash flow: 45,000,000 won What is the 3-year forward indirect rate for dollars and South Korean won? 926.3515 won per $ (Round to four decimal places.) What is the 4-year forward indirect rate for dollars and South Korean won? 903.9325 won per $ (Round to four decimal places.) What is the 5-year forward indirect rate for dollars and South Korean won? 882.0561 won per $ (Round to four decimal places.) Second, complete step 2 by converting the cash flows into dollars. What is the dollar amount of the initial investment, CFo? $(Round to the nearest cent.) Enter your answer in the answer box and then click Check Answer. ? 11 parts Clear All Check Answer remaining Second, complete step 2 by converting the cash flows into dollars. What is the dolar amount of the initial investment, CF,? (Round to the nearest cent) What is the dollar amount of cash flow in year 1, CF,? (Round to the nearest cent) What is the dollar amount of cash flow in year 2.CF2? (Round to the nearest cent) What is the dollar amount of cash flow in year 3, CF,? (Round to the nearest cert) What is the dollar amount of cash flow in year 4, CFA? (Round to the nearest cont) What is the dollar amount of cash flow in years, CFy? (Round to the nearest cent) Third, complete step 3 by calculating the present value of the cash flows. w the discount rate in the United States for the expansion project 14% what is the procent value of CF, (Round to the nearest cent) What is the present value of CF,? (Round to the nearest cent) What is the present value of CF,? $ $ $ Round to the nearest cent) What is the dollar amount of cash flow in year 4, CF4? $ (Round to the nearest cent.) What is the dollar amount of cash flow in year 5, CF? $ (Round to the nearest cent.) Third, complete step 3 by calculating the present value of the cash flows. If the discount rate in the United States for the expansion project is 16%, what is the present value of CF,? (Round to the nearest cent.) What is the present value of CF2? $ (Round to the nearest cent.) What is the present value of CF3? $ (Round to the nearest cent.) What is the present value of CF4? $ (Round to the nearest cent.) What is the present value of CFg? (Round to the nearest cent.) Finally, complete steps 4 and 5 by applying the NPV decision rule. Should Farbucks expand to South Korea? (Select the bex response.) O A. No, Farbucks should not expand to South Korea because the project's NPV is - $99,987 B. No, Farbucks should not expand to South Korea because the project's NPV is - $96,687 OC. Yes, Farbucks should expand to South Korea because the project's NPV is $99,987 OD Yes Farbucks should gynand in South Korea