$13-5$ Consider the investment in China from Problem $13\mathrm{.}1.$

a$.$ Suppose that a manager expects the following future exchange rates:

$E[S_1^{II\frac{S}{C}NY}]=$ILS$\frac{0\mathrm{.}5801}{C}NY$

$E[S_2^{\text{I}\text{L}\text{S}\frac{?}{CNY}}]=$ILS$\frac{0\mathrm{.}6089}{C}NY$

$E[S_3^{\text{I}\text{I}\text{S}\frac{?}{CNY}}]=$ILS$\frac{0\mathrm{.}6392}{C}NY$

Using a yuan discount rate of $11\mathrm{.}745$ percent and the shekel discount rate of $15$ percent, calculate NPV from the parent and project perspectives. Should the manager invest in the project? Should the manager hedge the project's currency risk exposure?

b$.$ Repeat part $($a$)$ using the following expected spot rates of exchange:

$E[S_1^{\text{I}\text{I}\text{S}\frac{?}{CNY}}]=$ILS$\frac{0\mathrm{.}5575}{C}NY$

$E[S_2^{\text{I}\text{L}\text{S}\frac{?}{CNY}}]=$ILS$\frac{0\mathrm{.}5625}{C}NY$

$E[S_3^{\text{I}\text{I}\text{S}\frac{?}{CNY}}]=$ILS$\frac{0\mathrm{.}5676}{C}NY$

Should the manager invest? Should the manager hedge the project's currency risk exposure?