can someone please explain this detail by detail. someone else did but it makes no sense to me how did they get the new rates of .0096 .0092 .0089

Part 2.B Germany Canadian Equipment Limited (CEL) has an investment opportunity in Japan. This project costs 1,000 million Japanese Yen now and is expected to produce cash flows of 200 million Yen in year one, 260 million Yen in year two, and 350 Yen million in year three. In addition, this subsidiary in Japan can be sold at the end of three years for an estimated amount of 800 million Yen. The current spot exchange rate is C$0.0100/Yen. The current risk-free rate in Canada is 1.0%. compared to that in Japan of 5.0%. The appropriate discount rate for the project is estimated to be 10%, the Canadian cost of capital for the company. Using home currency approach, calculate the net present value (NPV) of CEL's investment project. Answer Key: Step 1: Canadian dollar will strengthen against Japanese Yen. Using the approximation UIP formula to estimate future FX rates: risk free ayon mation risk free E(St) - so * [1+ (Rfc - Read)] E(SI) = (1/0.01)*(1+0.050-0.010) - $0.0096/Yen; E(S2) - $0.0092/Yen; E(S3) - $0.0089/Yen. Step 2: Calculate CS-denominated future cash flows: CF0 -$10.000; CF1 - $1.923; CF2 - $2.404; CF3 = $10.223. Step 3: Use $ cash flows and S discount rate to compute NPV: NPV = -10.000 + 1.748 + 1.987 + 7.681 - $1.416 million. Part 2.B Germany Canadian Equipment Limited (CEL) has an investment opportunity in Japan. This project costs 1,000 million Japanese Yen now and is expected to produce cash flows of 200 million Yen in year one, 260 million Yen in year two, and 350 Yen million in year three. In addition, this subsidiary in Japan can be sold at the end of three years for an estimated amount of 800 million Yen. The current spot exchange rate is C$0.0100/Yen. The current risk-free rate in Canada is 1.0%. compared to that in Japan of 5.0%. The appropriate discount rate for the project is estimated to be 10%, the Canadian cost of capital for the company. Using home currency approach, calculate the net present value (NPV) of CEL's investment project. Answer Key: Step 1: Canadian dollar will strengthen against Japanese Yen. Using the approximation UIP formula to estimate future FX rates: risk free ayon mation risk free E(St) - so * [1+ (Rfc - Read)] E(SI) = (1/0.01)*(1+0.050-0.010) - $0.0096/Yen; E(S2) - $0.0092/Yen; E(S3) - $0.0089/Yen. Step 2: Calculate CS-denominated future cash flows: CF0 -$10.000; CF1 - $1.923; CF2 - $2.404; CF3 = $10.223. Step 3: Use $ cash flows and S discount rate to compute NPV: NPV = -10.000 + 1.748 + 1.987 + 7.681 - $1.416 million