1. Refer to the data in Problem 10.3. If the firm expects to borrow the initial investment ($15,500,000) at 10% over five years (paying back the loan in equal annual payments of $4,088,861), determine the project's net cash flows.
2. An investor enters into a short forward contract on 191 thousand GBP for 1.59 USD each. How much does the investor profit if the exchange rate at the end of the contract is 1.66 USD/GBP? Note: GBP is British pounds, USD is US dollar.