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Please show in excel spreadsheet if possible. The development and construction of the project will take 3 years, and the project will operate for 3
Please show in excel spreadsheet if possible. The development and construction of the project will take years, and the project will operate for years. The riskless rate is ; the rate of return on the market portfolio is and the projects beta is DCC has no debt. DNFC expects to spend $ for land one year after the contract is awarded t Construction of the building will cost $ million, and the equipment will cost $ million, both of which will be cash outflows at t The life of the building is years, and it will be depreciated toward a salvage value of $ The equipment has a fiveyear useful life with no salvage value. The equipment will be replaced at fiveyear intervals for $ million upon each replacement. Straightline deprecation will be used over years t t etc. To support operations, DNFC expects to need $ in additional cash, to invest $ in accounts receivable and $ in inventory, and to maintain $ in accounts payable. The investment in net working capital occurs at the start of operations t The revenues from the project will amount to $ fixed costs will be $ and variable costs will be $ all on an annual basis. At the end of the project, the firm is expected to restore the surrounding area for $ The firms marginal tax rate is The value of the land is expected to be constant over the project's life, and the building can be sold for $ at the end of the project. What is the minimum amount the municipality would have to pay DNFC when the contract is awarded t to make it worthwhile for DNFC to undertake the project? Hint: Find the projects cost of capital and create a byitem capital budgeting analysis Excel spreadsheet like Table page in the EFS textbook Also, look at the Perma Filter example Canvas Modules, Chapter Additional Resources, and Chapter Parts & videos to guide you through setting up the spreadsheet. Finally, remember that a project must have AT LEAST an NPV so shareholders achieve the desired rate of return and the share price is not negatively impacted.
Please show in excel spreadsheet if possible.
The development and construction of the project will take years, and the project will operate for years. The riskless rate is ; the rate of return on the market portfolio is and the projects beta is DCC has no debt. DNFC expects to spend $ for land one year after the contract is awarded t Construction of the building will cost $ million, and the equipment will cost $ million, both of which will be cash outflows at t The life of the building is years, and it will be depreciated toward a salvage value of $ The equipment has a fiveyear useful life with no salvage value. The equipment will be replaced at fiveyear intervals for $ million upon each replacement. Straightline deprecation will be used over years t t etc. To support operations, DNFC expects to need $ in additional cash, to invest $ in accounts receivable and $ in inventory, and to maintain $ in accounts payable. The investment in net working capital occurs at the start of operations t The revenues from the project will amount to $ fixed costs will be $ and variable costs will be $ all on an annual basis. At the end of the project, the firm is expected to restore the surrounding area for $ The firms marginal tax rate is The value of the land is expected to be constant over the project's life, and the building can be sold for $ at the end of the project.
What is the minimum amount the municipality would have to pay DNFC when the contract is awarded t to make it worthwhile for DNFC to undertake the project?
Hint: Find the projects cost of capital and create a byitem capital budgeting analysis Excel spreadsheet like Table page in the EFS textbook Also, look at the Perma Filter example Canvas Modules, Chapter Additional Resources, and Chapter Parts & videos to guide you through setting up the spreadsheet. Finally, remember that a project must have AT LEAST an NPV so shareholders achieve the desired rate of return and the share price is not negatively impacted.
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