Carpet Baggers, Inc., is proposing to construct a new bagging plant in a country in Europe. The two prime candidates are Germany and Switzerland. The forecasted cash flows from the proposed plants are as follows:

The spot exchange rate for euros is $1.3/€, while the rate for Swiss francs is SFr 1.5/$. The interest rate is 5% in the United States, 4% in Switzerland, and 6% in the euro countries.
The financial manager has suggested that, if the cash flows were stated in dollars, a return in excess of 10% would be acceptable.
Should the company go ahead with either project? If it must choose between them, which should ittake?

Germany (millions of euros) 00 15 15 +20 20 +20 18.8 Switzerland (millions of Swiss francs120 +20 30 +30 +35 +35 +35 12.8