a. Review the different items that are used in the multinational capital budgeting example

(Spartan, Inc.). Describe the items that you would include on a spreadsheet if you conducted a multinational capital budgeting analysis of investing dollars to expand your existing language business in a different location.

b. Assume that you recognize your limitations in predicting the future exchange rate of the invoice currency for your expanded business. You think that there are several possible exchange rate scenarios, each with equal probability of occurrence. Explain how you could use this information to estimate the future net present value (NPV) and make a decision about whether to accept or reject the project.

c. Now assume that there is also much uncertainty about individuals’ demand for your service in the new location. Explain how you can incorporate this uncertainty along with the uncertainty of exchange rate movements so that you can make a decision about whether to accept or reject the project.

d. Explain how you would derive a required rate of return for your capital budgeting analysis. What type of information would you use to derive the required rate of return?