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Use the following information to answer questions 5-8. Popular Automobiles, a firm headquartered in the United States, wants to apply the NPV method to valve

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Use the following information to answer questions 5-8. Popular Automobiles, a firm headquartered in the United States, wants to apply the NPV method to valve is first foreign project in Germany ani has a two year life. The projected expected cash flows in Euros are as follows: Year 0 1 2 Expected Free Cash Flow (Million Euros) 40 2530 The current exchange rate is $1.30 per Euro. Assume the yield curve in the US and Germany is flat. The risk free rate in dolas is 40 and is free rate in Euros is 3.5%. The firm's WACC (weighted average cost of capital for this project in USD is 8% and its WACC for this project in Eston 7% 5. Calculate the NPV of this project in USD using expected USO cash flows $4.15 mill $ 9.568 mill $ 12.438 mil $10.714 mill $11.998 mal 5. Calculate the NPV of this project in USD using expected USD cash flows 6. Calculate the NPV of this project in USD using expected Euro cash flows 7. What will be your recommendation based on the above analysis? 8. What will be your recommendation if the firm's WACC in USD was 77% instead and all the che normation given awe

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