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Saputo Inc. is a Canadian diary company and one of the countrys top 10 exporters, earning approximately $15B in revenue per year. Saputo has subsidiaries

Saputo Inc. is a Canadian diary company and one of the countrys top 10 exporters, earning approximately $15B in revenue per year. Saputo has subsidiaries in the USA, UK, Argentina, and Australia. Assume Saputo Inc is considering 2-year project in Mexico with a CAD $25million initial investment and: Saputos cost of capital is 5% The required rate of return for this project is 10% The project estimated to generate MXN $175million (pesos) in Year 1 and MXN $300million (pesos) in Year 2, excluding the salvage value The Mexican peso (MXN) exchange rate is steady at $0.062 over the 2-year period. a. What is the Mexican break-even salvage value? Show all your work. (round to nearest thousand) b. If the salvage value is expected to be MXN $1million (pesos), is the project feasible? Why or why not? (45 words max) c. If the Mexican dollar depreciates in Year 2 instead of staying stable, would this have a positive, negative, or no effect on Saputos NPV? Explain. (45 words max)

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