HELP SOLVE. The other similar question available is a bit different than this one, so DONT COPY PASTE! Notice the UK inf

[answerhappygod]

HELP SOLVE. The other similar question available is a bit
different than this one, so DONT COPY PASTE! Notice the UK
inflation rate - could be a confusion trap by examiner. Time:
45 mins. Thanks!

1. Dell (US Company) is evaluating the proposal of a new Keyboard
and computer accessories factory in an overseas country (Germany).
The currency in the overseas country is Euro. The risk-free rate in
the United States is 5 percent. 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. Currently, the
Euro and USD have an exchange rate of €1/$2. The total capital cost
is 1.5 million USD and is depreciated using the straight-line
method over three years to a zero-salvage value. Dell’s discount
rate is 10%, and its home currency is USD. Assume; initially, Dell
will require .1 million Euros in working capital for this project.
However, after the project, Dell will not receive anything from the
working capital. In Germany, the CFFA will be 0.9 million euros in
the first year, followed by 1 million euros in the second year. The
inflation rate in the United States is 8%, and the inflation rate
in the UK is 6%. The final year cash flow from the asset will
be 1.1 million euros. The risk-free rate in Germany is 7 percent.
Based on NPV criteria, should this project be accepted?