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please answer in a excel sheet, thanks A company is considering the below project which is expected to have the below first year (t=1) financial
please answer in a excel sheet, thanks
A company is considering the below project which is expected to have the below first year (t=1) financial information (only net working capital is due immediately, i.e., at t=0 ): Revenue: $58 million EBITDA: \$14 million Depreciation and Amortization: S2.5 million Capital Expenditure: \$2 million Tax rate: 30% Net working Capital at t=0 only: $7 million (the NWC will be recovered at the end of the project) It is expected that over 10 years the EBITDA margin will increase by 0.4% a year, while depreciation and cap-ex remain a constant % of revenues. Revenues will grow by 3% a year (after 10years, the project is completed and NWC is recovered). Required rate of return is 11%. Q16: At what initial cost (maximum) you would accept the project? ( 10 points) Step by Step Solution
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