Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Can you show me how to work on these questions on Excel please with detailed formulas? Thank you som much Company XYZ decides to invest
Can you show me how to work on these questions on Excel please with detailed formulas? Thank you som much
Company XYZ decides to invest in a $25,000,000 project. The company will finance the project with 50% debt and 50% equity. The term of the loan is interest only, compounded annually, 5%, and over 5 years. The project will allow the company to produce and sell an additional 100,000 widgets at $130 a widget. The cost of producing each widget is 50% of revenue. Furthermore, the project will fully depreciate in 5 years on a straight-line basis and the project will end. The tax rate is 21% 1) What is 1st year CF to equity holders? $5,691,250 2) What is the 5th year CF to equity holders? $(6,808,750) 3) What is the IRR? 17.04% 4) If the company's required rate on this project is 10%, what is the NPV? $1,312,798 5) Would you accept it? Yes or No? State whyStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started