A1 fx Accessibility tab summary: Data is provided in rows 5 to 26 . Statement 1 fo \begin{tabular}{|c|c|c|c|} \hline & A & B & C \\ \hline 2 & Calculate Net Present Value & & \\ \hline 3 & Given data & & \\ \hline \multicolumn{4}{|l|}{4} \\ \hline 5 & Initial Investment & U.S. Dollars & Euros \\ \hline 6 & Beginning of Year 1 & 24,000,000 & 20,000,000 \\ \hline \multicolumn{4}{|l|}{7} \\ \hline 8 & Total After-Tax Annual Cash Flow (in Euros) & \begin{tabular}{c} Based on \\ Current Tax \\ Rates \\ \end{tabular} & \begin{tabular}{c} Based on \\ Possible Change \\ in Tax Rates \end{tabular} \\ \hline 9 & Year 1 & 5,000,000 & 5,000,000 \\ \hline 10 & Year 2 & 6,000,000 & 5,500,000 \\ \hline 11 & Year 3 & 8,000,000 & 7,300,000 \\ \hline \multicolumn{4}{|l|}{12} \\ \hline 13 & Probability of change in tax rates & 40% & \\ \hline \multicolumn{4}{|l|}{14} \\ \hline 15 & Present value factors at 10% & PV Factor & \\ \hline 16 & Period 1 & 0.9091 & \\ \hline 17 & Period 2 & 0.8265 & \\ \hline 18 & Period 3 & 0.7513 & \\ \hline \multicolumn{4}{|l|}{19} \\ \hline 20 & Estimated terminal value & Euros & \\ \hline 21 & End of Year 3 & 14,000,000 & \\ \hline \end{tabular} \begin{tabular}{|c|c|c|c|c|c|} \hline \multirow[t]{2}{*}{ A1 } & fx Accessibility t & nary: Data is provide & rows 5 to 26 . Sta & ement 1 for studer & res \\ \hline & A & B & \multirow[t]{2}{*}{ C } & D & E \\ \hline 23 & Forecasted Exchange Rates & \begin{tabular}{l} U.S. Dollars per \\ Euro \end{tabular} & & & \\ \hline 24 & Year 1 & 1.15 & & & \\ \hline 25 & Year 2 & 1.13 & & & \\ \hline 26 & Year 3 & 1.12 & & & \\ \hline \multicolumn{5}{|l|}{27} & \\ \hline 28 & Required: & & & & \\ \hline 29 & \multicolumn{4}{|c|}{ Note: Use cells A2 to C25 from the given information to complete this question. } & \\ \hline 30 & & & & & \\ \hline 31 & \multicolumn{4}{|c|}{ a. Determine the expected net present value of the potential foreign investment from a project perspective. } & \\ \hline 32 & & & & & \\ \hline 33 & \multicolumn{4}{|c|}{ a-1. Show the calculation of NPV (in Euros) with current tax rates from a project perspective. } & \\ \hline 34 & & & & & \\ \hline 35 & Total After-Tax Annual Cash Flow & Euros & PV Factor & Present Value & \\ \hline 36 & Year 1 & 5,000,000 & 0.9091 & 4,545,500 & \\ \hline 37 & Year 2 & 6,000,000 & 0.8265 & 4,959,000 & \\ \hline 38 & Year 3 & 8,000,000> & 0.7513 & 6,010,400 & \\ \hline 39 & & & & 15,514,900 & \\ \hline 40 & Less: Initial investment (in Euros) & & & 20,869,565 & \\ \hline 41 & Net Present Value (NPV) in Euros & & & (5,354,665) & \\ \hline \end{tabular} A1 fx Accessibility tab summary: Data is provided in rows 5 to 26 . Statement 1 for student presentatio A B C D E 43 a-2. Show the calculation of NPV (in Euros) with possible change in tax rates from a project perspective. 44 \begin{tabular}{|c|c|c|c|c|} \hline 45 & Total After-Tax Annual Cash Flow & Euros & PV Factor & Present Value \\ \hline 46 & Year 1 & 5,000,000 & 0.9091 & 4,545,500 \\ \hline 47 & Year 2 & 5,500,000 & 0.8265 & 4,545,750 \\ \hline 48 & Year 3 & 7,300,000 & 0.7513 & 5,484,490 \\ \hline 49 & & & & 14,575,740 \\ \hline 50 & Less: Initial investment (in Euros) & & & 20,000,000 \\ \hline 51 & Net Present Value (NPV) in Euros & & & (5,424,260) \\ \hline \end{tabular} 52 53 a-3. Show the calculation of Expected Net Present Value from a project perspective. 54 \begin{tabular}{ll|r|r|r|} \hline 55 & & NPV & Probability & Expected NPV \\ \cline { 2 - 5 } 56 & Current tax rates & (5,354,665) & 0.40 & (2,141,866) \\ 57 & Possible change in tax rates & (5,424,260) & 0.40 & (2,169,704) \\ \hline 58 & Expected Net Present Value (NPV) in Euros & & (4,311,570) \\ \hline 59 \end{tabular} A1 fx Accessibility tab summary: Data is provided in rows 5 to 26 . Statement 1 for student presentation is pro A B C D E b. Determine the expected net present value of the potential foreign investment from a parent company perspective. b-1. Show the calculation of NPV (in U.S. Dollars) with current tax rates from a parent company perspective. \begin{tabular}{|c|c|c|c|} \hline TACF & U.S. Dollars & PV Factor & Present Value \\ \hline Year 1 & 5,750,000 & 0.90912 & 5,227,325 \\ \hline Year 2 & 6,780,000 & 0.8265 & 5,603,670 \\ \hline \multirow[t]{2}{*}{ Year 3} & 15,680,000 & 0.7513 & 11,780,384 \\ \hline & & & 22,611,379 \\ \hline Less: Initial investment (in U.S. Dollars) & & & 24,000,000 \\ \hline Net Present Value (NPV) in U.S. Dollars & & & (1,388,621) \\ \hline \end{tabular} b-2. Show the calculation of NPV (in U.S. Dollars) with possible change in tax rates from a parent company perspective. \begin{tabular}{|c|c|c|c|} \hline TACF & U.S. Dollars & PV Factor & Present Value \\ \hline Year 1 & 5,750,000 & 0.9091 & 5,227,325 \\ \hline Year 2 & 6,215,000 & 0.8265 & 5,136,698 \\ \hline \multirow[t]{2}{*}{ Year 3 (includes terminal value) } & 23,856,000 & 0.7513 & 17,923,013 \\ \hline & & & 28,287,035 \\ \hline Less: Initial investment (in U.S. Dollars) & & & 23,000,000 \\ \hline Net Present Value (NPV) in U.S. Dollars & & & 5,287,035 \\ \hline \end{tabular} A1 fx Accessibility tab summary: Data is provided in rows 5 to 26 . Statement 1 for student presentation is provide A B C D 82 b-3. Show the calculation of Expected Net Present Value from a parent company perspective. 83 84 85 86 87 \begin{tabular}{|c|c|c|c|} \hline & NPV & Probability & Expected NPV \\ \hline Current tax rates & (1,388,621)(1) & 0.40 & (555,448)(1 \\ \hline Possible change in tax rates & 5,287,035 & 0.40 & 2,114,814 \\ \hline Expected Net Present Value (NPV) in U.S. Dollars & & & 1,559,366 \\ \hline \end{tabular} 88 89