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EXAMSETNO 1 QUESTIONONE The Ethiopian Telecommunications Agencyisplanningtoannouncet he5GwirelessLicensing Bid. The Agencywantstoprovidethecontra ctforaperiodof10years. Accordingtothebiddocument, the 3G system will provide access, by means of one or more
EXAMSETNO 1 QUESTIONONE The Ethiopian Telecommunications Agencyisplanningtoannouncet he5GwirelessLicensing Bid. The Agencywantstoprovidethecontra ctforaperiodof10years. Accordingtothebiddocument, the 3G system will provide access, by means of one or more radio links, to a wide range oftelecommunication services supported by the fixed networks; which grants telecommunication ashiftfromvoice-centricservicestomultimedia- orientedlikevideo, voice, data, faxservices.Ethio-telecom is one of the bidders for the 5G license. On behalf of Ethio telecom, you have receivedthefollowingdatatoevaluatetheproposal. Thetotalinvestm entisaboutBirr340million. Assumethis is also the bid price to be submitted by Ethio telecom. Assume also 10% cost of capital forEthiotelecomprojects. Expected ServicePortf olio Annual Net Cash Estimated Investment( Flow(millionBi millionBirr) rr) Voice 18 75 Video 21 100 Data Transfer 10 80 Others 15 85 Required: a. What is thetotalpresentvalueof theportfolio? b. Whatis thenetpresentvalueof theportfolio? c. Amongthefourlistedservices, whichoneisthe mostprofitableservice? C. d. IfEthiotelecomisawinner, shoulditlaunchalltheseservices? Why
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