Question: 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

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:

C0 C1 C2 C3 C4 C5 C6 IRR(%)
Germany (millions of euros) 65 +15 +20 +20 +25 +25 +25 21.9
Switzerland (millions of Swiss francs) 102 +25 +35 +35 +40 +40 +40 24.3

The spot exchange rate for euros is $1.35/, while the rate for Swiss francs is SFr1.55/$. The interest rate is 6% in the United States, 5% in Switzerland, and 7% 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.

a. Calculate the NPV in dollars for the German plant. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.

b. Calculate the NPV in dollars for the Swiss plant. (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)

PLEASE show work step by step, do not use excel

thank you

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