$5)$ Faulpeltz Gmbh$.$ is a German subsidiary of Lazy Ltd$.,$ a British MNC$.$ Faulpeltz is considering a $5-$year project in Germany that requires an initial investment of $1,360$ million Euros $($EU$).$ The project will generate cash flows of EU $450$ million per year in the years $1$ to $4$ and EU $575$ million at the end of year $5.$ The required rate of return for projects of similar risk in Germany is $10\%,$ and in the U$.$K$.$ is $12\%.$ The annual inflation rate in Germany is expected to be $4\mathrm{.}5\%$ for the next several years. British $($annual$)$ inflation is expected to be $2\mathrm{.}5\%.$ The current spot exchange rate is $0\mathrm{.}65/$EU$.$

a$.$ Calculate the NPV in $-$terms from the project$$s $($Faulpeltz Gmbh$.)$ point of view.

b$.$ Calculate the NPV in $-$terms from the parent$$s $($Lazy Ltd$.)$ point of view.

c$.$ What is your recommendation to Lazy$$s managers in terms of whether they should accept or reject the project?

d$.$ Should Lazy$$s managers try to hedge the EU projected cash flows? Why$/$why not?