Question $6$

You are evaluating a $10-$year investment that requires an initial expenditure of $2\mathrm{.}000\mathrm{.}000.$ The

investment is not expected to generate any cash flows during the first two years. At the end of

year three, the investment is expected to generate $400\mathrm{.}000$ of net cash inflow. The net cash

inflow will grow by $5\%$ per year thereafter until the end of the investment period. Assuming that

the discount rate is $10\%$ per year, should you accept the investment or not? Show your

calculations.