Centralia, a US corporation manufacturing electrical appliances, is planning a FDI in Spain in order to gain broader access to the EU$.$ The company is currently exporting $9600$ units per year to Spain, which are expected to increase by $5\%$ p$.$a$.,$ and which yield a contribution of $$35.$

If the firm proceeds with the FDI, it expects to sell $25000$ units in year $1,$ which are estimated to rise by $12\%$ p$.$a$.$ Units are expected to be priced in Euros and their contribution is expected to be $40$ Euros$/$unit

Inflation is estimated to be $2\mathrm{.}1\%$ in Spain, while in the US it is estimated at $3\%.$ The current exchange rate is $$\frac{1\mathrm{.}32}{1\mathrm{.}00}$ Euro.

Cost of construction is estimated at $5\mathrm{.}5$ million Euros and the borrowing capacity of the project is estimated at $$2\mathrm{.}904\mathrm{.}000.$ It should also be noted that Centralia has accumulated $937\mathrm{.}500$ Euros $($pre$-$tax$),$ which it does not wish to repatriate and may use towards the financing of the project $($these funds have been taxed at $20\%).$ The depreciation period of the project is expected to be $8$ years. An attractive feature of the FDI is that the government of Spain is willing to provide a concessionary loan of $4$ million Euros at a rate of $5\%.$ Centralia usually borrows at $8\%$ in $ and $7\%$ in Euros. The loan is to be repaid in eight equal installments.

The $ all$-$equity cost of capital of Centralia is $12\%$ and the tax rate in the US and Spain is $35\%.$

$\frac{11}{4}\frac{?}{2024}$