Question 16 6 pts The government proposes to build a broadband network NBN to provide high-speed broadband to the households of an island. The construction of the project includes a total amount of $400 million payable half-yearly in arrear over the construction period of two years, and an additional payment of $100 million at the end of the construction. The government will receive a service fee of $60 per annum payable monthly for each household connected to the broadband. It is expected that 100,000 households will be immediately connected to the network on project completion, the first payment will be due in one month after connection. An additional 50,000 households will be connected at the end of each month for the following 12 months starting one month after the project completion. The first payment will be due in one month after connection. The service fee is adjusted to $X per annum in year six (i.e. the first payment at the end of month 5 x 12 +1 = 61), and thereafter increases annually at 4% per annum effective at the beginning of each year. The cost of funding the project is 8% per annum effective. The broadband network continues for 45 years from the commencement of project construction. Based on the Net Present Value criteria, calculate the minimum value of X for which the project is financially meaningful. Upload Choose a File Question 16 6 pts The government proposes to build a broadband network NBN to provide high-speed broadband to the households of an island. The construction of the project includes a total amount of $400 million payable half-yearly in arrear over the construction period of two years, and an additional payment of $100 million at the end of the construction. The government will receive a service fee of $60 per annum payable monthly for each household connected to the broadband. It is expected that 100,000 households will be immediately connected to the network on project completion, the first payment will be due in one month after connection. An additional 50,000 households will be connected at the end of each month for the following 12 months starting one month after the project completion. The first payment will be due in one month after connection. The service fee is adjusted to $X per annum in year six (i.e. the first payment at the end of month 5 x 12 +1 = 61), and thereafter increases annually at 4% per annum effective at the beginning of each year. The cost of funding the project is 8% per annum effective. The broadband network continues for 45 years from the commencement of project construction. Based on the Net Present Value criteria, calculate the minimum value of X for which the project is financially meaningful. Upload Choose a File
