Prescott, Corp. owns a project in Macedonia. Prescott is concerned that the Macedonian government may impose capital controls which means Prescott would have to leave all funds in Macedonia until the project is liquidated in five years. The current spot rate for the Macedonia denar is $$\mathrm{.}01905.$ The current interest rate in Macedonia is $7\%.$ Prescott$$s required return on the project is $22\%.$

a$.$ Prescott uses the current spot rate to forecast the expected spot rate. What will happen to the NPV of the project if the capital controls are implemented? Briefly explain your answer. No calculations necessary.

b$.$ Assume the Macedonia denar is expected to appreciate about $20\%$ per year over the next five years. How does that change your answer to $($a$)$ above? Briefly explain your answer. No calculations necessary.