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please solve showing complete steps Covidam Company clinches a contract to supply cleaning services to a nursing home for the next 5 years. Under the

please solve showing complete steps
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Covidam Company clinches a contract to supply cleaning services to a nursing home for the next 5 years. Under the contract, the Company will be paid $1 million a year. To take up this contract, it would have to invest in new cleaning equipment costing $600,000 which will be depreciated straight line to zero over 5 years. There is no salvage value at the end of 5 years. Labour cost will be $300,000 per year and overheads $250,000 per year. The Company will need to invest in net working capital of $350,000. It plans to issue $1 million worth of bonds for 5 years at a coupon rate of 6% and will price the bonds at par. The Company has an existing bank loan of $9 million. The cost of debt from the bank loan is the same as the bonds. The common stock of the Company is selling for $10 per share and it has 2 million shares outstanding. Expected dividend next year is $1 per share and dividends are expected to grow at 2% per annum into the foreseeable future. The tax rate is 20% (a) Determine the operating cash flows of the project by filling in the following table (Unit:\$) according to the context. (b) Compute the cash flow from assets for the project. (c) Describe two other measures besides NPV that give the same accept/reject decision as NPV. You need to show how these two measures are related to NPV. (Note: No calculation is needed)

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