Course Learning Assessment 2 - CLOs 1, 2, 3, 4, 5, 6, 7. Please see the rubrics for grading criteria.

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 $1.3/, while the rate for Swiss francs is CHF 1.5/$. 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 it take? Justify your answer.
• Cite six (6) peer-reviewed articles not including your textbook.