2. A U.S. MNC is considering a capital project in France. The size and timing of the after-tax cash flows from the project are: Year 2 3 CF () ( 750.00) 350.00 305.00 400.00 The inflation rate in the euro zone is t =3.3%, the inflation rate in dollars is Ts = 2.2%, and the %3D business risk of the investment would lead an unlevered U.S. based firm to demand a return on equity of Kud= 12.5%. The current spot exchange rate S($/)=1.15 The company's normal borrowing rate in dollars (is) is 7.0% and 7.8% in Euros (ie). The project will run for three years. (Show all your work to get partial credit). Calculate the NPV of the project in Euros and in US dollars. a. b. Calculate the IRR of the project in Euros and in US dollars. 2. A U.S. MNC is considering a capital project in France. The size and timing of the after-tax cash flows from the project are: Year 2 3 CF () ( 750.00) 350.00 305.00 400.00 The inflation rate in the euro zone is t =3.3%, the inflation rate in dollars is Ts = 2.2%, and the %3D business risk of the investment would lead an unlevered U.S. based firm to demand a return on equity of Kud= 12.5%. The current spot exchange rate S($/)=1.15 The company's normal borrowing rate in dollars (is) is 7.0% and 7.8% in Euros (ie). The project will run for three years. (Show all your work to get partial credit). Calculate the NPV of the project in Euros and in US dollars. a. b. Calculate the IRR of the project in Euros and in US dollars