It is the year $2023$ and Pork Barrels, Incorporated, is considering construction of a new barrel plant in Spain. The forecasted cash flows

in millions of euros are as follows:

The spot exchange rate is EUR$/$USD $=1\mathrm{.}37.$ The interest rate in the United States is $11\%,$ and the euro interest rate is $8\%.$ You can

assume that pork barrel production is effectively risk$-$free.

a$-1.$ Calculate the NPV of the euro cash flows from the project.

a$-2.$ What is the NPV in dollars?

b$.$ What are the dollar cash flows from the project if the company hedges against exchange rate changes?

c$.$ Suppose that the company expects the euro to depreciate by $5\%$ a year, will this affect the value of the project?