Convert the initial investment and annual ZAR cash flows into AED using the given actual spot exchange rates.

Here are the NPV calculations for the project in AED: c) What is the NPV in AED if the actual pattern of ZAR/AED exchange rates is: S(0) = 3.75; S(1) = 5.7; S(2) = 6.7; S(3) = 7.2; S(4) = 7.7; and S(5) = 8.2? Step 1: Convert the initial investment and annual ZAR cash flows into AED using the given actual spot exchange rates. The exchange rate is given as ZAR/AED, meaning 1 AED = X ZAR. To convert ZAR to AED, divide the ZAR amount by the exchange rate. Initial Investment (Year 0): CF_0^AED = -ZAR 10,000,0003.75 ZAR/AED = -AED 2,666,666.67 Cash Flow Year 1: CF_1^AED = ZAR 3,000,0005.7 ZAR/AED ≈ AED 526,315.79 Cash Flow Year 2: CF_2^AED = ZAR 4,000,0006.7 ZAR/AED ≈ AED 597,014.93 Cash Flow Year 3: CF_3^AED = ZAR 5,000,0007.2 ZAR/AED ≈ AED 694,444.44 Cash Flow Year 4: CF_4^AED = ZAR 6,000,0007.7 ZAR/AED ≈ AED 779,220.78 Cash Flow Year 5: CF_5^AED = ZAR 7,000,0008.2 ZAR/AED ≈ AED 853,658.54 Step 2: Calculate the present value of each AED cash flow using the parent firm's cost of capital (k_AED = 9.5\% = 0.095). PV_t = CF_t^AED(1 + k_AED)^t PV_0 = -AED 2,666,666.67 PV_1 = AED 526,315.79(1 + 0.095)^1 = AED 526,315.791.095 ≈ AED 480,653.69 PV_2 = AED 597,014.93(1 + 0.095)^2 = AED 597,014.931.199025 ≈ AED 497,917.47 PV_3 = AED 694,444.44(1 + 0.095)^3 = AED 694,444.441.312822375 ≈ AED 529,000.00 PV_4 = AED 779,220.78(1 + 0.095)^4 = AED 779,220.78