You work for Funky Turtle Limited, which is a firm whose home currency is the Chilean peso (CLP) and that is considering a foreign investment. The investment yields expected after-tax Japanese yen (JPY) cash flows (in millions) as follows: Expected inflation is 6.0% in the Chilean peso and 8.0% in the Japanese yen. Assume that the international parity conditions hold. Required returns for projects in this risk class are: - For CLP: 19.0% in Chilean peso; and - For JPY: 21.245\% in Japanese yen The spot exchange rate is S0 CLP/JPY = CLP 5.0984/JPY. The project country's government has Japanese yen-denominated bonds outstanding that currently yield 6.09% per annum. Your firm pays a marginal corporate tax rate of 25% on its Japanese yen profits, which is the same marginal tax rate that your firm pays on its parent company profits in Chilean peso. Suppose that all of the Japanese yen cash flows generated by the project must be loaned to the country's government at an interest rate of 0% per annum until one year after the completion of the project (i.e. until t=4 ). Factoring in the opportunity cost of the blocked funds, what is the NPV of Funky Turtle's project? a. The NPV from the project's perspective is -CLP 117.34 million b. The NPV from the project's perspective is -CLP 114.89 million c. The NPV from the project's perspective is -CLP 112.28 million d. The NPV from the project's perspective is -CLP 111.01 million e. The NPV from the project's perspective is -CLP 113.86 milion You work for Funky Turtle Limited, which is a firm whose home currency is the Chilean peso (CLP) and that is considering a foreign investment. The investment yields expected after-tax Japanese yen (JPY) cash flows (in millions) as follows: Expected inflation is 6.0% in the Chilean peso and 8.0% in the Japanese yen. Assume that the international parity conditions hold. Required returns for projects in this risk class are: - For CLP: 19.0% in Chilean peso; and - For JPY: 21.245\% in Japanese yen The spot exchange rate is S0 CLP/JPY = CLP 5.0984/JPY. The project country's government has Japanese yen-denominated bonds outstanding that currently yield 6.09% per annum. Your firm pays a marginal corporate tax rate of 25% on its Japanese yen profits, which is the same marginal tax rate that your firm pays on its parent company profits in Chilean peso. Suppose that all of the Japanese yen cash flows generated by the project must be loaned to the country's government at an interest rate of 0% per annum until one year after the completion of the project (i.e. until t=4 ). Factoring in the opportunity cost of the blocked funds, what is the NPV of Funky Turtle's project? a. The NPV from the project's perspective is -CLP 117.34 million b. The NPV from the project's perspective is -CLP 114.89 million c. The NPV from the project's perspective is -CLP 112.28 million d. The NPV from the project's perspective is -CLP 111.01 million e. The NPV from the project's perspective is -CLP 113.86 milion