Kiwanda LTD a company based in Kenya intends to invest in the United States of America (USA) the company will entail an initial capital of 450 Million United States Dollars ($). The project is expected to generate the following cash flows over its 5- year life.

YearCash flows ($)

190,000,000

2120,000,000

3140,000,000

4160,000,000

580,000,000

The current spot exchange rate is 100 Kenyan shilling per United States Dollar ($). The risk free rate in Kenya is 10% and the risk free rate in United States is 6%. Kiwanda Ltd required rate of return on the project is 16%.

Required

1. The Net Present Value for the project
2. Advise the management of Kiwanda Ltd on whether to undertake the project based on your answer above