ABC, a US based firm is considering establishing an operation (XYZ) in country MM where uses currency WW. The initial investment will be 100,000 WW cash outflow from ABC to XYZ on December 31 Year 0 and XYZ will start operation on January 1, Year 1. Expected earnings before interest and tax (EBIT) are composed of sales, variable cost, and fixed cost (in WW) Year 1 Sales 70,000 Year 2 75,000 Year 3 100,000 Variable costs (as % of sales) 50% 50% 50% Fixed costs, all from depreciation 8,000 8,000 8,000 The project will be financed as follows: Source Debt in WW (in WW) 40,000 Interest rate 8% Loan from ABC (borrowed in USD) $80,000*0.25 20,000 5% Parent ABC equity (in USD) $160,000*0.25 | 40,000 N/A Total 100,000 Exchange Rate 1/1/Yearl 12/31/Yearl 12/31/Year2 12/31/Year3 WW corporate tax 0.25 WW Per USD 0.32 WW Per USD 0.26 WW Per USD 0.28 WW Per USD WW ithholding tax on the repariation of terminal value US tax on interest income from foreign country US tax on dividend and terminal value from foreign subsidiary Present value factor: Year 1 Year 2 Year 3 Tax Rate 15% 22% 20% 0% 0.833 0.694 0.579