To determine the NPV using local cash flows and foreign cash flows, we need to calculate the net cash flows for each year and then discount them using the appropriate discount rate.

1. Local Cash Flows: Year 1: Net Cash Flow = Before Tax Earnings - Corporate Tax Net Cash Flow = 300,000,000 - (300,000,000 * 0.3) Net Cash Flow = 300,000,000 - 90,000,000 Net Cash Flow = 210,000,000

Year 2: Net Cash Flow = 320,000,000 - (320,000,000 * 0.3) Net Cash Flow = 320,000,000 - 96,000,000 Net Cash Flow = 224,000,000

Year 3: Net Cash Flow = 350,000,000 - (350,000,000 * 0.3) Net Cash Flow = 350,000,000 - 105,000,000 Net Cash Flow = 245,000,000

Year 4: Net Cash Flow = 340,000,000 - (340,000,000 * 0.3) Net Cash Flow = 340,000,000 - 102,000,000 Net Cash Flow = 238,000,000

Year 5: Net Cash Flow = 330,000,000 - (330,000,000 * 0.3) Net Cash Flow = 330,000,000 - 99,000,000 Net Cash Flow = 231,000,000

1. Foreign Cash Flows: To calculate the foreign cash flows, we need to convert the local cash flows to USD using the spot rate.

Year 1: Foreign Cash Flow = Net Cash Flow / Spot Rate Foreign Cash Flow = 210,000,000 / 57.50 Foreign Cash Flow = $3,652,173.91

Year 2: Foreign Cash Flow = 224,000,000 / 57.50 Foreign Cash Flow = $3,895,652.17

Year 3: Foreign Cash Flow = 245,000,000 / 57.50 Foreign Cash Flow = $4,260,869.57

Year 4: Foreign Cash Flow = 238,000,000 / 57.50 Foreign Cash Flow = $4,139,130.43

Year 5: Foreign Cash Flow = 231,000,000 / 57.50 Foreign Cash Flow = $4,017,391.30

1. NPV Calculation: To calculate the NPV, we need to discount the cash flows using the local discount rate.

NPV using local cash flows = (Net Cash Flow Year 1 / (1 + Discount Rate)^1) + (Net Cash Flow Year 2 / (1 + Discount Rate)^2) + (Net Cash Flow Year 3 / (1 + Discount Rate)^3) + (Net Cash Flow Year 4 / (1 + Discount Rate)^4) + (Net Cash Flow Year 5 / (1 + Discount Rate)^5)

NPV using local cash flows = (210,000,000 / (1 + 0.12)^1) + (224,000,000 / (1 + 0.12)^2) + (245,000,000 / (1 + 0.12)^3) + (238,000,000 / (1 + 0.12)^4) + (231,000,000 / (1 + 0.12)^5)

NPV using local cash flows = 210,000,000 / 1.12 + 224,000,000 / 1.2544 + 245,000,000 / 1.4049 + 238,000,000 / 1.5744 + 231,000,000 / 1.7599

NPV using local cash flows = 187,500,000 + 178,571,429 + 174,242,424 + 151,515,152 + 131,313,132 NPV using local cash flows = 823,142,137

To calculate the NPV using foreign cash flows, we need to discount the cash flows using the local discount rate and then convert them back to local currency using the spot rate.

NPV using foreign cash flows = (Foreign Cash Flow Year 1 / (1 + Discount Rate)^1) + (Foreign Cash Flow Year 2 / (1 + Discount Rate)^2) + (Foreign Cash Flow Year 3 / (1 + Discount Rate)^3) + (Foreign Cash Flow Year 4 / (1 + Discount Rate)^4) + (Foreign Cash Flow Year 5 / (1 + Discount Rate)^5)

NPV using foreign cash flows = ($3,652,173.91 / (1 + 0.12)^1) + ($3,895,652.17 / (1 + 0.12)^2) + ($4,260,869.57 / (1 + 0.12)^3) + ($4,139,130.43 / (1 + 0.12)^4) + ($4,017,391.30 / (1 + 0.12)^5)

NPV using foreign cash flows = $3,652,173.91 / 1.12 + $3,895,652.17 / 1.2544 + $4,260,869.57 / 1.4049 + $4,139,130.43 / 1.5744 + $4,017,391.30 / 1.7599

NPV using foreign cash flows = $3,263,586.96 + $3,103,448.28 + $3,034,090.91 + $2,628,787.88 + $2,281,818.18 NPV using foreign cash flows = $14,311,732.21

Therefore, the NPV using local cash flows is $823,142,137 and the NPV using foreign cash flows is $14,311,732.21.