FINANCE-Company XYZ, a manufacturer or buildings
.1em;”>Company XYZ, a manufacturer or buildings, plans to expand its operations to Germany. The expansion will cost $14.5 million and is expected to generate annual net cash flows of 2.15 million euros for a period of 12 years and then the operation will be sold for 1 million euros (net of taxes). The cost of capital for the project is 14%. Using a spot exchange rate of $1.25 / euro as the forecast FX rate for the euro for the term of the project, compute the NPV of this expansion project. Convert the annual cash flow to Dollars before discounting and give your answer in Dollars.
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