EAN: 2020-11-25 13:45 GEORGEAARONJRLARES 114'03" 5 Question 5 (10 Marks) Consider the following international investment opportunity. It involves a gold mine that can be opened at a cost, then produces a positive cash flow, but then requires environmental clean up: Year 0 - 80,000 Year 1 200,000 Year 2 - 150,000 The current exchange rate is $1.50=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. Required: (1) Find the euro-zone cost of capital to compute the euro-denominated NPV of this [5 Marks) project. (2) Find the dollar cash flows to compute the dollar-denominated NPV of this project. [5 Marks] 11:50 PM (10.09) 400) 24/11/2020