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Carpet Baggers, Inc., is proposing to construct a new bagging plant in a country in Europe. The two prime candidates are Germany and Switzerland. The

Carpet Baggers, Inc., is proposing to construct a new bagging plant in a country in Europe. The two prime candidates are Germany and Switzerland. The forecasted cash flows from the proposed plants are as follows:

C0 C1 C2 C3 C4 C5 C6 IRR(%)
Germany (millions of euros) 72 +22 +27 +27 +32 +32 +32 29.8
Switzerland (millions of Swiss francs) 111 +32 +42 +42 +47 +47 +47 28.6

The spot exchange rate for euros is $1.42/, while the rate for Swiss francs is SFr1.62/$. The interest rate is 5% in the United States, 4% in Switzerland, and 6% in the euro countries. The financial manager has suggested that, if the cash flows were stated in dollars, a return in excess of 12% would be acceptable.

a. Calculate the NPV in dollars for the German plant. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.

b. Calculate the NPV in dollars for the Swiss plant. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

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