Africa Oil is considering whether to invest ZAR 100 million in order to explore oil in urkana County, Kenya. The investment is expected to generate cash flows worth Shs.150 million per year in real terms forever. The firms current exchange rate is ZAR 1/Kes 10 and this is expected to remain stable in real terms forever. The firm is however worried that future governments may nationalize all o WACC is 10%. The il exploiting foreign companies without compensation. If this were to happen, it is estimated it would occur at the end of the fifth year or never at all thereafter. It is assumed that if nationalization will take place, it will be after Africa Oil will have realized the fifth year's cash flows. Africa Oil has a trade insurance policy which guarantees compensation of 30% of the original i nationalization occur before the seventh year. The insurance benefits will be realized a year after nationalization is effected. nvestment value should Required: C) Determine the NPV of this project using the subsidiary perspective assuming no nationalization ever takes place. Should the project be accepted? Page 2 of 3