Intro Tennessee Whiskey is a U.S. producer of alcoholic drinks. The company is evaluating opening a new distillery in Scotland for serving the British market. The project will last four years, after which the distillery will be sold. The company has estimated the following data: Initial investment required: 80 million After-tax salvage value in year 4: 48 million Annual depreciation: 8 million British income tax rate: 29% Fraction of after-tax income remitted to parent: 100% Withholding tax rate imposed by Britain: 0% Stock beta: 1.4 Bond interest rate: 7% Target capital structure: 90% equity and 10% debt U.S. tax rate: 29% Treasury bond yield: 2% Expected return on the S&P 500: 5% The company expects the following revenue, costs, depreciation and exchange rates: Year 0 Year 1 Year 2 Year 3 80 80 80 64 64 64 Revenue ( million) Costs ( million) Depreciation ( million) Exchange rate (per ) 8 8 8 $1.33 $1.29 $1.25 $1.21 Part 1 Attempt 1/10 for 10 pts. What is the cash flow to the subsidiary in year 3, including the after-tax salvage value of the distillery (in million)? 0+ decimals Submit Part 2 Attempt 1/10 for 10 pts. What is the cash flow to the parent in year 3 (in $ million)? 0+ decimals Submit Part 3 Attempt 1/10 for 10 pts. What is the cost of equity? 3+ decimals Submit | Attempt 1/10 for 10 pts. Part 4 What is the cost of capital? 3+ decimals Submit Attempt 1/10 for 10 pts. Part 5 What is the NPV of the project (in $ million)? 1+ decimals Submit