1. Baps Corporation is considering a $10 million investment in the establishment of a subsidiary in Scotland. Baps expects to sell their subsidiary for 2 million after five years. Their required rate of retum is 10%. Listed below are the estimated cash flows over the project's lifetime: (a) What is the net present value of the Scotland project? What's the investment decision? (5+3) (b) What if you must raise the required rate of return 15% due to increased country risk? (Compute the revised NPV). Does your decision change now? (5+2)