This is an accounting finance course problem.

Using domestic model (1st formula) and multinational model (2nd formula) for a MNC find the net present value of expected cash flows, given the required rate of return is 12 percent.

Thank you.

Consider the following data for an MNC: CASH FLOWS (denominated in foreign currencies) t Euro Canadian Dollar British Pound 1 100 300 150 2 125 175 125 3 150 200 175 4 100 100 200 5 175 250 150 EXCHANGE RATES (value of foreign currency in terms of dollars) t Euro Canadian Dollar British Pound 1 1.2 0.8 2 2 1.3 0.9 1.95 3 1.35 1.1 1.75 4 1.25 1 1.8 5 1.2 1.05 1.85 If investors require a return of 12 percent, find the present value of expected cash flows. Make sure to show all your work. Recall: 27 V SE(CF) (1+k)' 3 Where V represents present value of expected cash flows E(CFs.r) represents expected cash flows to be received at the end of period t, n represents the number of periods into the future in which cash flows are received, and k represents the required rate of return by investors. I E(CF.) = E (CF.)+E(S.) O Where CF, represents the amount of cash flow denominated in a particular foreign currencyj at the end of period t, Sj, represents the exchange rate at which the foreign currency (measured in dollars per unit of the foreign currency) can be converted to dollars at the end of period t