Please answer: 1, 2, and 3. Question three includes options of: reduces, increases, does not affect.

Loiavile Co. is a U 5. firm considering a project in Austria which it has an initial cashi oullay of $4 million, Louisvile will accept the projech only if it can satisty its requered rate of return f 19 percent. The project would definitely generste 2 million euros in one year from sales to a large corporate customer in Austria. In addition, is also expects to receive 5 million euros th one ywar from sales to other customers in Austna. Loumbille's best guess is that the euro's spot rate will be $1.24 in one year. Today, the spot rate of the euro is $1.40, while the onerear forward rate of the euro is $1.73. If touiville accepts the project, it would hedge all the receivables tesulting from sales to the large carporate customer but none of the oxpected ecenvables due to expected salev to other customers. 1. Eaumate the net present value of the project. Do not round intermediate calculations. Round your answer to the nearest dollat. Use a minus sign to enter a negative value, if 2. Assume that touisille considers altemative finaneing for the project in which a would use 56 mallian cosh while the remairang inatial outloy would come from borroning euros. In thes case, it mould need 1,600,000 euros to repoy the loan (orinopal plus imeiest) at the end of orie yean. Assume no tax elfects due to this allemative financing. Estintete the NirV of the progect under these conditions. Do not round intermediate calculabons. Hount your answer to the nearest dollae, Use a munus aign to enter an negaive value, it 5 3. Do vou think the Louswille's exiospe to exchange rete rikk die to the poyect if it uses the alternatove linancing (evilainect in part b) is highec, lower, of the aame as if it has. an indal cash outloy of $8 milton (and does not borrow any funda)? Brefly eaplsin. Partial linarsing with euros US. exposure to exchange rate mk becaune using the alternative financing the amount of fiends to he remitted to the