Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need the solution in excel. Cash expenses during the first full year (E) =$40 million Noncash expenses deductible for tax purposes each year (C)

image text in transcribedI need the solution in excel.

Cash expenses during the first full year (E) =$40 million Noncash expenses deductible for tax purposes each year (C) = $50 million Income tax rate (T)=20% Annual growth rate of cash revenues (gR)=4% Annual growth rate of cash expenses (gE)=4% Treasury rate: 8% Credit Spread=150 basis points Safety Margin (for the possibility that interest rates might increase)=150 basis points Life of the loan measured from the date of project completion (N)=10 years Target cash flow coverage ratio (?)=1.6 Deferral period=3 years

(20 Pts) Assume that a high speed rail project has a cost of S1 billion and a target capital structure with 75% debt ratio. Given the following parameters, what should be the amount of first full year's cash revenues in order for the project to support the target capital structure? (20 Pts) Assume that a high speed rail project has a cost of S1 billion and a target capital structure with 75% debt ratio. Given the following parameters, what should be the amount of first full year's cash revenues in order for the project to support the target capital structure

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Finance questions