The balance sheet of an American manufacturing company is given here. the company's cost of debt is 6% and cost of equity is 8.75%. Corporate income tax rate of 34%. A. What discounting factor should the company use for their Investment decisions? B. If this company makes an investment in Switzeland, where cash flows are in Swiss franc & interest rates are 2% (in U.S. 5%). What cost of capital should the company use to discount franc cash flows?

Balance Sheet Cash :130 $

Receivables :220 $

Inventories :160 $

Other current assets :10 $

Total Current Assets :520 $

Plant :300 $

Equipment :100 $

Building :80 $

Total Investments :1000 $

Notes Payable :120 $

Accounts payable :80 $

Total Current Labilties :200 $

Long Term Liabilties :250 $

Total Labilites :450 $

Equity capital :450 $

Surplus capital :50 $

Retained Ecamings :50 $

Total Financing :1000 $