Intro

Netflix sells its streaming service in many countries, including in Europe. The company is projecting the following cash flows and exchange rates for a project in Europe:

Year	0	1	2	3
Cash flow ( million)	-39	15.6	15.6	19.5
Exchange rate ($/)	1.11	1.11	1.11	1.11

The appropriate dollar cost of capital is 9%.

Part 1

What is the dollar NPV of the project if the exchange rate is expected to be a constant $1.11 per euro (in $ million)?

Part 2

What is the dollar NPV of the project if the euro is expected to appreciate according to the following schedule (in $ million)?

Year	0	1	2	3
Exchange rate ($/)	1.11	1.17	1.26	1.39

Part 3

What is the dollar NPV of the project if the euro is expected to depreciate according to the following schedule (in $ million)?

Year	0	1	2	3
Exchange rate ($/)	1.11	1.03	0.98	0.93