Probkmit (5.5 polni The VTech Corporation MTC has the opportunity to invest either in a project in London (Spain) of in project in Brussels (Belgium), The expected return on such projects is 30%. And the project in London requires an investment of 23.150. Besides, the project in London offers the following expected cash flows Year 3 Expected cash flows of the 14.000 8.CX) 9,000 11.0XCO project in London (e) 4 Analysis of the project in London: Would you accept to invest in the project in London? Calculate and Explain. What is then the maximum amount you will accept to invest in this project in London? Explain. Why the capitalization process is used? 1. To determine the future value b. To determine the present value c. To determine the expected return d. To determine the initial investment Why the discouted process is used? a. To determine the future value 1. To determine the present value c. To determine the expected return d. To determine the final wealth If the nel present value is positive, then a. the internal rate of a return is lower than the expected return b. the internal rate of a retum is higher than the expected return e, the present value of future cash flows is equal to the initial investment d. the present value of future cash flows is lower than the initial investment Ur the bet present value is negative, then a. the antemal rate of a retum is lower than the expected return te internal rate of a return is higher than the expected return c. the present value of future cash flows is equal to the initial investment the present value of future cash flows is hisher than the inital investment is the Internal Rule of Return of this project in London higher or lower than the expected return which is 30% (no calculation required)? Explain Concerning the project in London, if V-Tech Corporation (VTC) is taking into account all the different states of the economy, their probability of occurring and their expected Internal Rate of Return, the decision will consider all of the information available Internal Rate of Return State of economy Probability on Project in London Boom 20% 35% Normal 35% 33% Recession 45% -5% Concerning the project in Brussels, the expected return is 13% and the risk is estimated at 18%. Comparison of the project in London with the project in Brussels: What are the retum and the risk of the project in London? Calculate. Which project has the higher risk-retum tradeoff, the project in London or the project in Brussels? Calculate. Explain. Thanks to the project in London, shareholders expect a retum of 16%. V-Tech Corporation (VTC) shareholders expect a dividend of 10 for the next year. Analysis of equity financing: If the current market value of the stock is 102. what is the dividend yield for a share of VTC stock? Calculate. If the dividend is the same for ever what would you pay for a share of VTC stock today? Calculate