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A wine lover has decided to start a winery. The initial investment will be $5 million...

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Finance

A wine lover has decided to start a winery. The initialinvestment will be $5 million on Day 1. The winery will require anadditional $1 million dollars investment at very beginning Year 1.The vines will mature over five years. Beginning at the end of year6, the winery is expected to produce net cash inflows of $2million, 4 mil in year 7, 6 mil in year 8, 8 mil in year 9 and 10mil in year 10. What is the NPV, IRR, and Payback (non- discountedand discounted) assuming a discount rate of 15 percent?

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4.1 Ratings (591 Votes)
NPV PV of Cash Inflows PV of Cash Outflows Year CF PVF15 Disc CF 0 600 10000 600 1 08696 2 07561 3 06575 4 05718 5 04972 6 200 04323 086 7 400 03759 150 8 600 03269 196 9    See Answer
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