Consider the following international investment opportunity.

Cash flows years 0-2: -64000 160,000 -100,000 The current exchange rate is $1.60 = 1.00. The inflation rate in the U.S. is 6 percent and in the euro zone 2 percent. The appropriate cost of capital to a U.S.-based firm for a domestic project of this risk is 8 percent. 1. Find the euro-zone cost of capital to compute is the dollar-denominated NPV of this project. 2. Compute the dollar cash flows to compute the dollar-denominated NPV of this project.