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I need and would appreciate if you could answer my question using the figures I give you please and thank you.

I need and would appreciate if you could answer my question using the figures I give you please and thank you.

FOREIGN CAPITAL BUDGETING Sandrine is a Swiss multinational manufacturing company. Currently, Sandrine’s financial planners are considering undertaking a 1-year project in the United States. The project’s expected dollar-denominated cash flows consist of an initial investment of $2,000 and a cash inflow the following year of $2,400. Sandrine estimates that its risk-adjusted cost of capital is 10%. Currently, 1 U.S. dollar will buy

0.96 Swiss franc. In addition, 1-year risk-free securities in the United States are yielding

3%, while similar securities in Switzerland are yielding 1.50%. a. If this project was instead undertaken by a similar U.S.-based company with the same risk-adjusted cost of capital, what would be the net present value and rate of return generated by this project?

b. What is the expected forward exchange rate 1 year from now?

c. If Sandrine undertakes the project, what is the net present value and rate of return of the project for Sandrine?

 
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