65 at the end of five years). The current spot rate is $0.95/euro , and the expected inflation rate in the U.S. is 4% per year and 3% per year in Europe. Question: Refer to Instruction 18.1. What is the initial investment for the Velo Rapid Revolutions project? A) $1,500,000 B) €1,600,000C) $1,600,000 D) €1,500,000Answer: D Question: Refer to Instruction 18.1. What are the annual after-tax cash flows for the Velo Rapid Revolutions project? A) €400,000B) €240,000C) €120,000D) €360,000Answer: D Question: Refer to Instruction 18.1. What is the NPV of the European expansion if Velo Rapid Revolutions first computes the NPV in euros and then converts that figure to dollars using the current spot rate? A) $1,520,000 B) $1,684,210 C) -$75,310 D) -$71,544 Answer: Question: Refer to Instruction 18.1. In euros, what is the NPV of the Velo Rapid Revolutions expansion? A) €1,524,690B) $1,611,317 C) -€75,310D) -€111,317Answer: Question: Refer to Instruction 18.1. What is the IRR of the Velo Rapid Revolutions expansion? A) 14.4% B) 10.3% C) 12.0% D) 8.6% Answer: Question: If a firm undertakes a project with ordinary cash flows and estimates that the firm has a positive NPV, then the IRR will be: A) less than the cost of capital. B) greater than the cost of capital. C) greater than the cost of the project. D) cannot be determined from this information