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The spot exchange rate for euros is $1.42/C, while the rate for Swiss francs is SFr1.62/$. The interest rate is 5% in the United States,

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The spot exchange rate for euros is $1.42/C, while the rate for Swiss francs is SFr1.62/\$. The interest rate is 5% in the United States, 4% in Switzerland, and 6% in the euro countries. The financial manager has suggested that, if the cash flows were stated in dollars, a return in excess of 12% would be acceptable. a. Calculate the NPV in dollars for the German plant. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. b. Calculate the NPV in dollars for the Swiss plant. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) Carpet Baggers, Inc., Is proposing to construct a new bagging plant in a country in Europe. The two prime candidates are Germany and Switzerland. The forecasted cash flows from the proposed plants are as follows: in Switzerland, and 6% in the euro countries. The financial manager has suggested that, if the cash flows were stated in dollars, a return in excess of 12% would be acceptable. a. Calculate the NPV in dollars for the German plant: (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places. b. Calculate the NPV in dollars for the Swiss plant. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.) c. Should the company go ahead with either project? Yes No d. If it must choose befween them, which should it take? German plant Swiss plant

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