A USA multinational is considering a European opportunity. The multinational is considering an initial investment of 12,000. The size and timing of the before interest and taxes cash flows is as follows:

Year	1	2	3	4	5
EBIT ()	800	600	700	1000	650

The following information is provided:

Inflation in US, = 4.2%

Inflation in the Eurozone, = 7.2%

Corporate tax rate in Eurozone, T = 40%

Cost of Equity to an unlevered USA firm, Kud = i$ = 15.2%

Current spot exchange between the US dollar and the Euro is S($/) = $1.31/

Required:

Using NPV method, appraise this project from the USA shareholders perspective and advise them accordingly