Melinda Deane, a new analysts at Hermosa and a recent MBA graduate, believes that it is a fundamental error to evaluate the Argentine project's prospective earnings and cash flows in dollars, rather than first estimating their Argentine peso (Ps) value and then converting cash flow returns to the U.S. in dollars. She believes the correct method is to use the end-of-year spot rate in 2012 of Ps3.50/$ and assume it will change in relation to purchasing power. (She is assuming U.S. inflation to be 1% per annum, Argentine inflation to be 5% per annum). She also believes that Hermosa should use a risk-adjusted discount rate in Argentina which reflects Argentine capital costs (20% is her estimate) and a risk-adjusted discount rate for the parent viewpoint capital budget (18%) on the assumption that international projects in a risky currency environment should require a higher expected return than other lower risk projects. How do these assumptions and changes alter Hermosa's perspective on the proposed investment?