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Q1 A project requires an initial investment of $100 million. This project will experience loss of $5 million per year for the next 5 years.
Q1 A project requires an initial investment of $100 million. This project will experience loss of $5 million per year for the next 5 years. After that (starting t = 6), the project is expected to generate positive cash flows of $30 million per year for the next 20 years. The project will require $10 million to close its operations (at t = 26). What is the MIRR and NPV of this project? Assume opportunity cost of capital of 10%. What is your recommendation based on both methods?
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