8 of The next 3 questions are based on the following information: You work for a firm whose home currency is the Euro (EUR) and that is considering a foreign investment. The investment yields expected a after-tax Swiss Franc (SFR) cash flows (in millions) as follows: -SFR305 in Year 0 and SFR130 in Year 1. The forecast free cash flow will then increase by 5% per annum over the next 3 years. At the end of 4 years, the life of the project will end. The expected rates of inflation in each country are constant per year: 4% in the Eurozone, and 9.00% in Switzerland. From the project's perspective the required return is 13.74%, while from the parent's perspective, the required rate of return is 8.52%. The spot exchange rate is EUR0.9615/SFR. What is the NPV of the project from the project's perspective? a. EUR98.206 million b. SFR107.993 million @CSFR102.134 million dEUR106.220 million Oe. None of the options in this question are correct estion 39 yet wered arked out of 00 What is the NPV of the project from the parent company's perspective? O a EUR60.036 million b. SFR217.547 million OC. EUR24 438 million d. SFR287.229 million O e None of the options in this question are correct. - Flag muestion O a EUR98 206 million O b. SFR107.993 million O c. SFR102.134 million d. EUR106.220 million Oe. None of the options in this question are correct What is the NPV of the project from the parent company's perspective? 3. EUR60.036 million O b. SFR217.547 million OG EUR24.438 milion od SFR287.229 milion O e None of the options in this question are correct 40 What is the correct course of action for the managers of the firm? tot O a. Accept the project O b. Accept the project. However, the firm should try to find a way to hedge the currency risk now to capture the NPV. Finance in the local currency, use currency forwards and sell the project to a local investor o e Reject the project because it is only adding value from the parent's perspective because of forecast favourable moments in the exchange rate Od Reject the project. It is not financially viable from both the project's perspective and the parent's perspective O None of the options in this question are correct