You work for an Israeli company that is considering an investment in China's Sichuan province. The...

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You work for an Israeli company that is considering an investment in China's Sichuan province. The investment yields expected after- tax Chinese new yuan cash flows (in millions) as follows: +CNY200m -CNY600m +CNY500m +CNY300m Expected inflation is 6 percent in shekels and 3 percent in yuan. Required returns for this risk-class are ILS = 15 percent in Israeli shekels and CNY = 11.745 percent in yuan. The spot exchange rate is So ILS/CNY = ILS 0.5526/CNY. Assume the international parity conditions hold. 1. Calculate NPV from the project's perspective by discounting at the appropriate risk-adjusted yuan rate CNY and then converting into shekels at the current spot rate. 2. Calculate NPV from the parent's perspective by converting yuan into shekels at expected future spot rates and then discounting at the appropriate rate in shekels. You work for an Israeli company that is considering an investment in China's Sichuan province. The investment yields expected after- tax Chinese new yuan cash flows (in millions) as follows: +CNY200m -CNY600m +CNY500m +CNY300m Expected inflation is 6 percent in shekels and 3 percent in yuan. Required returns for this risk-class are ILS = 15 percent in Israeli shekels and CNY = 11.745 percent in yuan. The spot exchange rate is So ILS/CNY = ILS 0.5526/CNY. Assume the international parity conditions hold. 1. Calculate NPV from the project's perspective by discounting at the appropriate risk-adjusted yuan rate CNY and then converting into shekels at the current spot rate. 2. Calculate NPV from the parent's perspective by converting yuan into shekels at expected future spot rates and then discounting at the appropriate rate in shekels.