5 Question 5 (10 Marks) Consider the following international investment opportunity. It involves a gold mine that can be opened at a cost, then produces a positive cash flow, but then requires environmental clean up: Year 0-80,000 Year 1 200,000 Year 2-150,000 The current exchange rate is $1.501.00. The inflation rate in the U.S. is 6 percent and in the euro zone 2 percent. The appropriate cost of capital to a U.S. -based firm for a domestic project of this risk is 8 percent Required: (1) Find the euro zone cost of capital to compute the euro-denominated NPV of this project [5 Marks) (2) Find the dollar cash flows to compute the dollar-denominated NPV of this project. 15 Marks)