5)Calculate the APV for the following project in Guatemala. The project will have 10-year life, and cost $10 million. If you finance with 100% equity, the US equity will have a beta of 1.3, but you plan to use 50% local debt financing. The expected market return in the US is 11%, the US risk-free rate is 4%, the local borrowing rate is 15%, and the currency is expected to depreciate at 5% per year. The project will generate cash flows of $2 million per year for the life of the project. You face a 35% tax rate.
