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please solve with excel. Thanks! Suppose a project generates revenues averaging $750,000 per year perpetually. Variable costs are always proportional to revenues, equal to 30%
please solve with excel. Thanks!
Suppose a project generates revenues averaging $750,000 per year perpetually. Variable costs are always proportional to revenues, equal to 30% of revenue. There are no other operating costs. The cost of capital is 13%. Your firm's long-term borrowing rate is 7%. A company proposes a fixed-price contract to cover costs at $200,000 per year for 10 years. Find the PV of the project with and without the fixed cost contract (with contract; without contract). A $3,679,060 ; $3,854,650) B ($3,854,650 ; $4,038,462) ($3,538,589; $3,679,060) D ($4,038,462 ; $5,259,366) E ($5,259,366; $4,230,769) Suppose a project generates revenues averaging $750,000 per year perpetually. Variable costs are always proportional to revenues, equal to 30% of revenue. There are no other operating costs. The cost of capital is 13%. Your firm's long-term borrowing rate is 7%. A company proposes a fixed-price contract to cover costs at $200,000 per year for 10 years. Find the PV of the project with and without the fixed cost contract (with contract; without contract). A $3,679,060 ; $3,854,650) B ($3,854,650 ; $4,038,462) ($3,538,589; $3,679,060) D ($4,038,462 ; $5,259,366) E ($5,259,366; $4,230,769)Step by Step Solution
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