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Consider the following project. Your initial investment cost is $350 million, and that investment will depreciate in straight-line form over the 25 -year life of
Consider the following project. Your initial investment cost is $350 million, and that investment will depreciate in straight-line form over the 25 -year life of the project. There are no new NWC requirements, and there will be no salvage value at the end of the project. The tax rate is 25%. The discount rate is 13%. The riskfree rate is 1.72. The market risk premium is 9.03. In addition, the possible values for Market Share, Price/Unit, VC/Unit, and Fixed Costs are below. You will conduct a full sensitivity analysis for this project, and you will be asked for each of these answers in questions below. First, calculate the expected value of the project. Present the answer in millions of $ and round your answer to the nearest 0.01 (so if your answer is $5,511,000, answer 5.51) Show your work for the EBIT step calculation for the question above (for partial credit only): Show your work for the NPV step calculation for the question above (for partial credit only)
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