You are evaluating a proposed expansion of an existing subsidiary located in Switzerland. The cost of...

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You are evaluating a proposed expansion of an existingsubsidiary located in Switzerland. The cost of the expansion wouldbe SF 15 million. The cash flows from the project would be SF 4.3million per year for the next five years. The dollar requiredreturn is 14 percent per year, and the current exchange rate is SF1.08. The going rate on Eurodollars is 6 percent per year. It is 4percent per year on Euroswiss. Use the approximate form of interestrate parity in calculating the expected spot rates.
a.
Convert the projected franc flows into dollar flows andcalculate the NPV. (Do not round intermediate calculationsand enter your answer in dollars, not in millions, rounded to twodecimal places, e.g., 1,234,567.89)
b-1. What is the required return on franc flows? (Do notround intermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)
b-2. What is the NPV of the project in Swiss francs? (Do notround intermediate calculations and enter your answer in francs,not in millions, rounded to two decimal places, e.g.,1,234,567.89)
b-3. What is the NPV in dollars if you convert the franc NPV todollars? (Do not round intermediate calculations and enteryour answer in dollars, not in millions, rounded to two decimalplaces, e.g., 1,234,567.89)

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You are evaluating a proposed expansion of an existingsubsidiary located in Switzerland. The cost of the expansion wouldbe SF 15 million. The cash flows from the project would be SF 4.3million per year for the next five years. The dollar requiredreturn is 14 percent per year, and the current exchange rate is SF1.08. The going rate on Eurodollars is 6 percent per year. It is 4percent per year on Euroswiss. Use the approximate form of interestrate parity in calculating the expected spot rates.a.Convert the projected franc flows into dollar flows andcalculate the NPV. (Do not round intermediate calculationsand enter your answer in dollars, not in millions, rounded to twodecimal places, e.g., 1,234,567.89)b-1.What is the required return on franc flows? (Do notround intermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)b-2.What is the NPV of the project in Swiss francs? (Do notround intermediate calculations and enter your answer in francs,not in millions, rounded to two decimal places, e.g.,1,234,567.89)b-3.What is the NPV in dollars if you convert the franc NPV todollars? (Do not round intermediate calculations and enteryour answer in dollars, not in millions, rounded to two decimalplaces, e.g., 1,234,567.89)

a.	Convert the projected franc flows into dollar flows andcalculate the NPV. (Do not round intermediate calculationsand enter your answer in dollars, not in millions, rounded to twodecimal places, e.g., 1,234,567.89)
b-1.	What is the required return on franc flows? (Do notround intermediate calculations and enter your answer as a percentrounded to 2 decimal places, e.g., 32.16.)
b-2.	What is the NPV of the project in Swiss francs? (Do notround intermediate calculations and enter your answer in francs,not in millions, rounded to two decimal places, e.g.,1,234,567.89)
b-3.	What is the NPV in dollars if you convert the franc NPV todollars? (Do not round intermediate calculations and enteryour answer in dollars, not in millions, rounded to two decimalplaces, e.g., 1,234,567.89)