lou work for a U.S.based firm that is considering a project in which it will sell the use of its technology to firms in Mexico. Your firm already has received orders that will generate 10 million Mexican pesos (MXN) in revenue at the end of next year. However, it might also receive a contract to provide this technology to the Mexican govemment. In this case, it will generate a total of MXN16,000,000 at the end of next year. It will not know whether it will receive the government order for a few months. Today's MXN spot rate is $0.05. The onc-year forward rate is $0.04. Your firm's only initial outlay is $320,000 to cover development expenses and your firm's required rate of retum for this project is 20% (both are regardiess of whether or not the Mexican government purchases the technology). Assume that your fimm decides to hedge the maximum amount of revenue that it will receive from the project. a. Determine the NPV if your firm receives the government contract. b. If your firm does not receive the contract, it will have hedged more than it needed to and will offset the excess forward sales by purchasing MXN in the spot market at the time the forward contract is due. If your firm expects that the MXN spot rate will be $0.045 one year from now, determine the NPV of the project assinuming that your firm does not receive the government contract. c. Now consider an alternative strategy in which your firm only hedges the minimum MXN revenue that it will receive. In this case, any revenue due to the govermment contract will not be hedged. Determine the NPV based on this alternative strategy and assume that your firm does not receive the govermment contract (and that your firm expects the MN spot rate to be S0.045 one year from now)