The following data is available about a firm which is considering undertaking a project i = 8% K_u = return on assets = 10% K_e= return on equity = 12% Tax rate = 30% Debt-to-equity ratio = 3 Risk-free rate = 3% Market risk premium = 8% Consider a similar project as in Questions 4 and 5, however, the project is now located in Malaysia and all the cash flows are in Malaysian Ringgit (MYR) the project requires 300 MYR of initial investment and generates cash flows for the parent of 200 MYR each year. Unlike in Question 4 and 5 above, there is no salvage value and no depreciation The parent company is located in the US and evaluates capital budgeting projects in USD. The parent company's WACC is 8% and its tax rate is 30% The current exchange rate is 4 16 MYR/USD. The Malaysian Ringgit is expected to depreciate by 5% annually against the USD What is the NPV of the project using the WACC methodology? Should the firm undertake the project? Explain The following data is available about a firm which is considering undertaking a project i = 8% K_u = return on assets = 10% K_e= return on equity = 12% Tax rate = 30% Debt-to-equity ratio = 3 Risk-free rate = 3% Market risk premium = 8% Consider a similar project as in Questions 4 and 5, however, the project is now located in Malaysia and all the cash flows are in Malaysian Ringgit (MYR) the project requires 300 MYR of initial investment and generates cash flows for the parent of 200 MYR each year. Unlike in Question 4 and 5 above, there is no salvage value and no depreciation The parent company is located in the US and evaluates capital budgeting projects in USD. The parent company's WACC is 8% and its tax rate is 30% The current exchange rate is 4 16 MYR/USD. The Malaysian Ringgit is expected to depreciate by 5% annually against the USD What is the NPV of the project using the WACC methodology? Should the firm undertake the project? Explain