An international business plan Consider whether or not to acquire a subsidiary that has the cash flow shown below in euros. There is no terminal value. You are given the basic data and the WACC in euros is 10 percent:

Discount foreign currency cash flows to present at the euro discount rate; and convert the NPV to the home currency, pounds sterling, at the spot exchange rate

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Year 0 1 2 3 4 5 Free-cash flows () (50) 10 10.5 11.0 11.6 12.2 Present value () (50.0) NPV () Spot exchange rate (/) 0.71 NPV ()