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(1) Kush Cone is a South African company that is considering a project in Greece. The project has the expected cash flows in euros () provided in the time line below. The current spot rate is 0.08775 /R .The euro ()is expected to depreciate relative to the South African (R) by 2% next year, depreciate 5% the following year, and appreciate by 7% in year 3. The parity conditions do not hold. The appropriate discount rate for projects of similar risk in Greece is 40% and in South Africa the appropriate discount rate for projects of similar risk is 45%. What is the NPV from the parent perspective and the project perspective for the project? Should Kush Cone accept or reject the project? Why? Show all necessary calculations to support your answer. -25,000,000 35,000,000 27,000,000 30,000,000 0 2 3 (1) Kush Cone is a South African company that is considering a project in Greece. The project has the expected cash flows in euros () provided in the time line below. The current spot rate is 0.08775 /R .The euro ()is expected to depreciate relative to the South African (R) by 2% next year, depreciate 5% the following year, and appreciate by 7% in year 3. The parity conditions do not hold. The appropriate discount rate for projects of similar risk in Greece is 40% and in South Africa the appropriate discount rate for projects of similar risk is 45%. What is the NPV from the parent perspective and the project perspective for the project? Should Kush Cone accept or reject the project? Why? Show all necessary calculations to support your answer. -25,000,000 35,000,000 27,000,000 30,000,000 0 2 3