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Figure 3 Discount rate determination Coefficient of Variation Discount Rate 0 . 2 0 8 % . 2 1 . 4 0 1 0 .
Figure Discount rate determination Coefficient of Variation Discount Rate Over Required Use the basic data in the case to put together an analysis similar to Table in the text. To determine earnings before depreciation and taxes EBDT subtract projected operating expenses from projected sales. Use a tax rate of percent. Determine the appropriate discount rate for the firm. Make a decision on whether the project is feasible, based on net present value analysis. What is the drawback to using a sixyear time horizon for the project?
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