Flagstaff corp is a us based mnc is considering establishing a three year project in Canada with us $38 million initial investment.

The firm cost of capital is 15%

The required rate of return on this project is 10%

The project is expected to generate cash flows of C$35 million in year 1, c$20million in year 2 and c$25 million in year 3, and is expected to have a salvage value of $30,000,000.

Assume 10% taxes on remitted funds, and a stable exchange rate of c$1.33, c$1.30 and c$1.25 per us$ in year 1,2,2 and 3 respectively.

All cash flows are remitted to the parent.

Calculate the net present value of the project. Hint use after tax cash flow