17) The following international investment opportunity is an oil well in central Italy that can easily be halted and re-started. There is an initial cost followed by positive cash flows, then there are overall clean-up costs as the area is environmentally sensitive. environmental clean-up.

Year 0 cash flows: 80 Million initial cost

Year 1 operational cash flow: 189 Million

Year 2 clean-up costs: 119 Million

The current exchange rate is $1.32 = 1.00. The inflation rate in the U.S. is 4.25 percent and in the euro zone 5.83 percent. The appropriate cost of capital to a U.S.-based firm for a domestic project of this risk is 9.459 percent.

Find the euro-zone cost of capital to compute is the dollar-denominated NPV of this project.

explain how this is answer $8,302,939