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QUESTION 2) (50 Points) Cce is a corporation which has $30 millions in EBITDA on revenues of $100 millions in the recent year. You're the

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QUESTION 2) (50 Points) Cce is a corporation which has $30 millions in EBITDA on revenues of $100 millions in the recent year. You're the CFO of the Cce and considering spending $15 millions in an inventory system with an advanced technology; the system has a useful life of 5 years and is subject to a straight-line depreciation with a salvage value of zero. With the system, you expect to have two economic benefits: With the new system in place, your revenues will grow 5% each year for the next 5 years starting with an initial revenue of $100 millions. Cce's EBITDA margin will stay the same for the next 5 years but you expect your non-cash working capital which is currently 10% of revenues to drop to 5% of revenues immediately and remain at that percentage level each year for the next 5 years. At the end of the 5th year, you expect to discard the inventory system. The working capital is expected to revert back to 10% of revenues. Your cost of capital is 10% and your marginal tax rate is 40%. a) Estimate the NPV of the investment

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