Foreign capital budgeting:

Solitaire Machinery is a Swiss multinational manufacturing company. Currently, Solitaire's financial planners are considering undertaking a 1-year project in the United States. The project's expected dollar-denominated cash flows consist of an initial investment of $1,000 and a cash inflow the following year of $1,200. Solitaire estimates that its risk-adjusted cost of capital is 15%. Currently, 1 U.S. dollar will buy 0.78 Swiss francs. In addition, 1-year risk-free securities in the United States are yielding 6.25%, while similar securities in Switzerland are yielding 5%.

If this project were instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project? Round your answers to two decimal places.

A.) NPV = $ ______ ........ Rate of return = ______%

B.) What is the expected forward exchange rate 1 year from now? Round your answer to two decimal places. SF per U.S. $ ______

C.) If Solitaire undertakes the project, what is the net present value and rate of return of the project for Solitaire? Round your answers to two decimal places. NPV = Swiss Francs Rate of return = _______%