3. Spartan Inc. is considering the development of a subsidiary in Singapore that could manufacture and well tennis rackets locally. All relevant information follows Initial investment is estimated at 20 million Singapore dollars (55), which include funds to support working capital needed for the project. The existing spot rate is $0.50 per SS. The ates to forecast future spot rates for subsequent years. expected inflation rate in Singapore is 255 and in the US is 3%. You will use those inflation il. Project life is expected to end in 4 years, it. The subsidiary will produce 60,000 rackets in cach of the first two years, then 100,000 in cach of the last two years. During the first two years, the price per racket is 55350, then S5360 in year 3, and S$380 in year 4. iv. The variable cost of production is $200 per racket in the first two years), then S$250 in year 3, and S$260 in year 4 v. The corporation tax rate is 20% in Singapore vi. The project is assumed to have a beta of 0.5 and the risk free rate of interest is usumed to be approximately 7.5% in Singapore. A market risk premium of 15% can be applied. Cost of debt is 15% while the company currently has no debt outstanding vii. The Singapore government will allow the subsidiary to depreciate the cost of the plant and equipment at a maximum rate of SS2 million per year. However, for the purposed of this exercise, assume no depreciation expense (ie, simplify your computation by not including D&A expense anywhere). viii. The Singapore government will send a payment of S$12 million to Spartan Inc. to assume ownership of the subsidiary at the end of four years. Assume that there is no capital gains tax on the sale of the subsidiary ix. The expense of leasing extra office space is S$1 million per year. Other umaal overhead expenses are expected to be $1 million per year. For each year, convert this after-tax profitto USS. (10 points) d. Now, calculate the present value of the project's net operating income (ie, all years combined) As part of this calculation, you will compute the discount rute. (10 pont e. Finally, calculate the net present value of Spartan (accounting for all 4 years and including the sale of the plant). (10 points) . Calculate future exchange rates for the years of the project's life. reader for your future computation purposes to write on your exchange rates in one row for years 1.2 et disa pesse kop 8 decimal places on your exchange rates to avoid rounding errors). (10 points) b. For each year, compute revenues, all expenses, and present your analysis in the form of an income statement where you arrive at after-tax profit in SS. 110 points)