Assume that in the original Ityesi example in the table below, all sales actually occur in the United States and are projected to be $60.0 million per year for four years. Keeping other costs the same, calculate the NPV of the investment opportunity. Assume the WACC is 6.8%.

The forward exchange rates are given below.

Year	0	1	2	3	4
Forward Exchange Rate ($/pound)	1.6000	1.5551	1.5115	1.4692	1.4280

4 TABLE 31.1 Expected Foreign Free Cash Flows from Ityesi's U.K. Project SPREADSHEET Year 0 1 2 3 Incremental Earnings Forecast ( millions) 1 Sales - 37.500 37.500 37.500 37.500 2 Cost of Goods Sold - (15.625) (15.625) (15.625) (15.625) 3 Gross Profit 21.875 21.875 21.875 21.875 Operating Expenses (4.167) (5.625) (5.625) (5.625) (5.625) 5 Depreciation (3.750) (3.750) (3.750) (3.750) 6 EBIT (4.167) 12.500 12.500 12.500 12.500 7 Income tax at 40% 1.667 (5.000) (5.000) (5.000) (5.000) 8 Unlevered Net Income (2.500) 7.500 7.500 7.500 7.500 Free Cash Flow 9 Plus: Depreciation 3.750 3.750 3.750 3.750 10 Less: Capital Expenditures (15.000) 11 Less: Increases in NWC 12 Pound Free Cash Flow (17.500) 11.250 11.250 11.250 11.250