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An investment plan to build a manufacturing faulty has the following construction schedule and costs : unit: & million 4 5 2 2 50 30
An investment plan to build a manufacturing faulty has the following construction schedule and costs : unit: & million 4 5 2 2 50 30 year wnstruction 20 40/50 wit moleted the inst When the construction is completed, the faulty will be operative for 15 years. The projected annual revenue during the operation period is 30 million at the first year, and then increases at 10% growth rate per year. The annual operating cost including labor, row material, and costs is 5 million at the first year, and then increase at a 12% growth rate per year. The working capital for operation is 5 million and increases at a 5% growth rate per years. The investment plan has a straight-line depreciation schedule of 10 years, and the salvage value is zero Answer the following question 1. what are the annual net cash flows of the project 2. what are the NPV, IRR ,and the discounted payback period of the project, given the investor's required rate of return(Re) is 15% 3. if the investor wants to borrow 120 million for the investment, and the interest rate is 5% (1) what are the revised annual cash flows (2) what are the revised NPV, IRR ,and the discounted payback period
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