$13.$ Capital Budgeting Example. Brower, Inc., just constructed a manufacturing plant in Ghana. The

construction cost $9$ billion Ghanian cedi. Brower

intends to leave the plant open for $3$ years. During the $3$ years of operation, cedi cash fl ows are expected to be $3$ billion cedi, $3$ billion cedi, and

$2$ billion cedi, respectively. Operating cash fl ows

will begin one year from today and are remitted

back to the parent at the end of each year. At the

end of the third year, Brower expects to sell the

plant for $5$ billion cedi. Brower has a required

rate of return of $17$ percent. It currently takes

$8,700$ cedi to buy one U$.$S$.$ dollar, and the cedi is

expected to depreciate by $5$ percent per year.

a$.$ Determine the NPV for this project. Should

Brower build the plant?

b$.$ How would your answer change if the value of

the cedi was expected to remain unchanged from

its current value of $8,700$ cedi per U$.$S$.$ dollar over

the course of the $3$ years? Should Brower construct

the plant then?