Question
The company has a new project of importing materials for The manufacturing of non disposable repirators that can be washed and reused. The cost of
The company has a new project of importing materials for The manufacturing of non disposable repirators that can be washed and reused. The cost of the machines in china is 82000$. Get the total cost of the machine to reach the facility where you are willing to run operations in Beirut city knowing that all imports can be packed in one 40 feets container and it is shipped from guanzhu. Assume you need to get the facility ready including rent cost for the 5 years life of the project and required installations is 50000$. The required total amount to get the project ready is to be calculated then you have to consider a loan of 150000$ from a bank at 8% annually and that the beta of your project is 1.2. The risk free rate of return in Beirut is 5% and investors demand 13% on their investments. Calculate the wacc of the project. Take your decision considering the following: IRR 12% IRR 8% IRR 10% what is the minimum IRR the you should accept the project if it exists.
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