Question: PLEASE HELP WITH PART A and B! THANKS. (a) Dell is evaluating the proposal of a new factory in an overseas country (Germany). The currency

PLEASE HELP WITH PART A and B! THANKS. (a) Dell is evaluating the proposal of a new factory in an overseas country (Germany). The currency in the overseas country is Euro. Dell will be renting a premise of 50,000 Square feet for this facility. Annually the factory expects to sell 20,000 units of Keyboard at 3 per keyboard. Total capital cost is 20,000 and is depreciated using the straight-line method over five years to a zero-salvage value. The monthly salary expense will be 3000, whereas annual utility and other expense will be 2,000. The annual total rent is 5,000. Variable costs are 10 per cent of annual sales revenue. Assume; initially, Dell will require 4,000 in working capital for this project. However, after the project, Dell will receive 2,000 from the working capital. Besides, there are no additional cash inflows and outflows from this project. The project does not have any tax implication. Calculate cash flows from asset (CFFA) for this project. Show the detailed calculation. (b) Use the CFFA amount from part A. Suppose, Dell, a U.S.-based international company, is implementing this project in Germany. Dells required rate of return is 10%, and its home currency is USD. The risk-free rate in the United States is 5 per cent, and the risk-free rate in Germany is 7 per cent. Currently, the Euro and USD have an exchange rate of 1/$2. The inflation rate in the United States is 8%, and the inflation rate in the UK is 6%. Based on NPV criteria, should this project be accepted? Show the detailed calculation process.

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