Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Given the following information for a new investment project : INFORMATION Amounts in Euros Lifetime(years) 6 revenue year 2022 727 898 revenue change per year
Given the following information for a new investment project :
INFORMATION | Amounts in Euros |
Lifetime(years) | 6 |
revenue year 2022 | 727 898 |
revenue change per year | -7% |
variable cost (%of revenue) | 18% |
salary year 2022 | 90 747 |
other operating expenses year 2022 | 49 009 |
salary change per year | 19% |
other operating expenses changes per year | 14% |
depreciation(linear over years) | 3 |
new loan | 27 584 |
interest level | 10% |
tax | 22% |
change working capital (% of revenue ) | 12% |
investment year 2022 | 48 268,00 |
downpayment loan | equal amount every year(5years) |
required rate of return | 36% |
Assume the decision is to be taken 1/1-2022. Loan repayments are to start in year 2023. Work out NPV of the project and indicate whether they should go ahead or not.
Step 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