Elvis Inc. is planning to establish a subsidiary in Australia to produce canola oil. The manufacturing facility will cost the parent company an initial investment of 8 million U.S. dollars (US$) to set up. The project will end in 3 years. At the end of the project, Elvis will sell the Australian subsidiary for as 5million to an Australian agriculture firm. This amount is net of capital gain tax and is not subject to the withholding tax. Elvis estimates the after-tax net cash flows are A$3,800,000, A$3,800,000, and A$6,200,000 at the end of the first, second and third year, respectively. The Australian government will impose a corporate tax of 26% and a withholding tax of 20% on remitted funds. Additionally, the Australian law requires the subsidiary to operate locally at least for 3 years before it can remit earnings to its parent company. The parent's required rate of return for the Australian project is 13%. Suppose that the subsidiary can invest at 7% p.a. in Australia throughout the project duration and the exchange rate for the Australian dollar would remain unchanged at $0.6699 throughout the project duration. Conduct a capital budgeting analysis to determine the feasibility of this project by completing the table below Year o Year 1 Year 2 Year 3 1 2 3 4 5 Before-tax earnings of subsidiary (AS) Host government tax (AS) After-tax earnings of subsidiary (AS) AS Net cash flow to subsidiary A$ remitted by subsidiary (100% of net cash flow) Sa 6 7 8 Reinvested fund from year 1 Reinvested fund from year 2 Accumulated AS Withholding tax on remitted funds AS remitted after withholding tax Salvage value Exchange rate Cash flows to parent PV of parent cash flows Initial investment (USS) Cumulative NPV (USS) 10 11 12 13