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Question 4: You are the CEO of an American company considering investing in Brazil. Your BRL cost of capital is 16.9%, and your USD cost

Question 4: You are the CEO of an American company considering investing in Brazil. Your BRL cost of capital is 16.9%, and your USD cost of capital is 15.9%. The project you are considering will cost 21M BRL to set up, and will produce free cash flows of 2.7M BRL per year in perpetuity, starting one year from today. Brazil and the US have the same inflation rate, and the current spot exchange rate is USD 0.24 per BRL. What is the NPV of this project (in the appropriate currency) from the parent viewpoint?

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