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Please answer all parts. Show your work and calculations Put your name on your paper You are the CFO of a beer, liquor and wine
Please answer all parts.
Show your work and calculations Put your name on your paper You are the CFO of a beer, liquor and wine distribution company, BLW Company, which is planning to expand into Texas. The CEO has asked you to do an analysis of the expected return on two new warehouses and related equipment required for the expansion. The new warehouses would be more efficient and could handle the volume anticipated in the new territory. The project would require an initial investment of $40 million with an add-on investment of $10 million at the end of Year 2. The expected after-tax returns for the next 5 years are: $8 million, $10 million, $16 million, $19 million, and $18 million respectively. You assume the project's returns are received at the end of each year and have determined the WACC is 8%. 1. Draw a timeline. 2. What is the NPV for this project? 3. Calculate the FV of Returns. 4. What is the project's MIRR? (Your answer should be a % carried to 2 places.) Step by Step Solution
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