Alpha Inc. is contemplating on investing in a manufacturing facility in China. As a consultant, you are charged with doing the financial analysis for this project. You expect the cash flows (in Chinese RMB) for this project to last indefinitely. You estimated the following cash flows for 2020-2024 and that the cash flows will grow at a constant rate starting 2025. Image transcription textYear FCF Other Data 2020 -90,000,000 RMB Growth rate of RMB FCF starting 2025 = 3% 2021 10,000,000RMB Cost of Capital for similar U.S. Projects (WACC) = 12% 2022 12,000,000 RMB Inflation in the U.S. = 2%2023 15,000,000 RMB Inflation in China = 6% 2024 16,000,000 RMB Spot rate = 6.8 RMB/USD… Show morea) What is the appropriate discount rate you should use to discount the RMB cash flows?b) What is the RMB NPV and IRR for this project? c) WhatistheUSDNPVforthisproject?(Pleaseshowyourcalculationconverting RMB NPV to USD NPV.)d) What are the i) RMB cost of capital and ii) RMB NPV if inflation in China rises to 7% and the U.S. inflation drops to 1%?AccountingBusinessFinancial AccountingTAM 521

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