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A wine lover has decided to start a winery. The initial investment will be US $5 million. The winery will require additional investments of 20%

A wine lover has decided to start a winery. The initial investment will be US $5 million. The winery will require additional investments of 20% per year of the base year investment till the end of the next five years while the vines mature. Beginning at the end of year 6, the winery is expected to produce net cash inflows of 200% of the annual additional investment made in the year next to the base year, growing at 20 percent per year for the coming 8 years. Calculate the NPV @7% and IRR of the project.

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