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Please help with the three questions below. FYI, this is all the given information. Zayo isexploringa fiber opportunity and you have been asked to assess
Please help with the three questions below. FYI, this is all the given information.
Zayo isexploringa fiber opportunity and you have been asked to assess the finandial merits of the deal. Network Requirements: Span 1-is 3.7 miles long and has 2 fibersrunning the entire length Span 2 -is 10.4 miles long and has 4 fibersrunning the entire length. Span 3-is 7.9 miles long and has 2 fibersrunning the entire length. Note: Fiber Miles Fiber count x sp an length Cost to build and operate: Span 1-90K in capital. Span 2-540K in capital. Span 3 170K in capital. equd to $50 peribere to be essed on a monthly bas Pricing- Mr. Customer has agreed to the following terms: Span 1-5 year commitment at monthly recurring charge of $4,750 and one-time, up-front payment of $75K. Span 2-7 year commitment at a monthly recurring charge of $7,200. Span 3-10 year com mitment at a monthly recurring charge of $3,200, plus 1 additional 2 year renew al period at 75% of the monthly recurring charges of the original deal. An annual consumer price index escalator of 2.5% is to be assessed on all monthly recurring charges. Requirements What is the Net Present Value ("NPV") and Internal Rate of Return ("IRR") of this deal? Should Zay o pursue this opportunity? Why or why not? Please provide a financial model outlining all cash flows and calculations along with your responseStep by Step Solution
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