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Consider a firm with the following parameters: Physical Lifespan 4 years Capital Expense, Year 0 $12,000 EBITDA / Year $7,000 Overall Firm Cost of Capital
Consider a firm with the following parameters:
| Physical Lifespan | 4 years |
|---|---|
| Capital Expense, Year 0 | $12,000 |
| EBITDA / Year | $7,000 |
| Overall Firm Cost of Capital | 5.9% |
| Tax Rate | 25% |
| Loan | $17,000 |
| Interest Payments | $561 |
| Depreciation Project Life | 6 years |
What is the total PV of this firm, including the loan?
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Public Finance and Public Policy
Authors: Jonathan Gruber
5th edition
1464143331, 978-1464143335
