Assume that in the original Ityesi example in this Table - all sales actually occur in the United States and are projected to be $ 56.4 million per year for four years. Keeping other costs the same, calculate the NPV of the investment opportunity. Assume the WACC is 6.5 %. The forward exchange rates are given below.

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TABLE 31.1 Expected Foreign Free Cash Flows from Ityesi's U.K. Project SPREADSHEET Year 0 1 2 3 4 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 4 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 Year 0 1 2 3 4 Forward Exchange Rate ($/) 1.5963 1.4485 1.4599 1.4045 1.3022 Calcualte the cash flows below: (Round to three decimal places. Forward exchange rates must be rounded to four decimal places.) Year 0 1 2 3 4 Free cash flow (millons of pounds) Forward exchange rate Free cash flow (millons of dollars) Sales in the US (millons of dollars) Cash flow (millons of dollars) The NPV is $ million. (Round to three decimal places.)