Use the following to solve questions 11 and 12:

Your company is looking at a new project in Mexico. The project will cost 8.5 million pesos. The cash flows are expected to be 2.05 million pesos per year for 4 years. The current spot exchange rate is 9.13 pesos per dollar. The risk-free rate in the US is 3% and the risk-free rate in Mexico is 6%. The dollar required return is 12%. (Use two decimal points in your calculations)

11-(2 points)What is the NPV of the project using the home currency approach?

A)-$289,955.57

B)-$294,684.82

C)-$393,147.56

D)-$397,261.39

E)None of the above

12- What is the NPV of the project using the foreign currency approach?

A)-$289,955.57

B)-$294,684.82

C)-$393,147.56

D)-$397,261.39

E)None of the above