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Lawson is a U! K based wine and spirits company It seeks to create a fine wine division to enhance its portiolio of global properties.

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Lawson is a U! K based wine and spirits company It seeks to create a fine wine division to enhance its portiolio of global properties. The CFO is scrutinizing a proposal to make an investment in a vineyard in Chile. It reguires the purchase of 20 acres of vineyards in the Maipg valley and setting up the requisite infrastructure for processing grapes and bottling wine. The project is expected to last five years, after which an exit through its sale to a local affliate is assumed. The following table lists the cash flows denominated in the Chilean peso (CLP) Assume spot GBPCLP 950 0 400 1150 2 120 3 100 4 100 5 140 Assume that GBPCLP remains constant at 950. Convert Lawson's GBP WACC of 9 percent, calculate the project NPV in GBP (use 38x.3x project cash flows into GBP (pounds) Using

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