The formulation for weighted average cost of capital (WACC):?

w d r d (1 T) + w p r p + w c r c

where:

r d = cost of debt

r p = cost of preferred equity

r c = cost of common equity

EBITDA less Revenue

EBIT + Gross Profit

Always 10%

R f + R d Beta + w(1-T) + Market Risk Premium

What is the NPV and IRR for the Walt Disney Direct To Consumer project, assuming the following information ($ in billions):

WACC is 10%

Acquisitions in 2019: $86

Revenue in 2020: $7.7

EBIT in 2020: $-4.5

Revenue in 2021: $11

EBIT in 2021: $-3.6

Revenue in 2022: $23

EBIT in 2022: $1.6

NPV: 32 IRR: 3.98%, where Acquisitions = CF₀ and Revenues = CF_1,2,3

NPV: -32 IRR: -3.98%, where Acquisitions = CF₀ and Revenues = CF_1,2,3

NPV: -91 IRR: 3.98%, where Acquisitions = CF₀ and Revenues = CF_1,2,3

NPV: -91 IRR: NAN%, where Acquisitions = CF₀ and EBIT = CF_1,2,3

What is the Payback time period for the Walt Disney DTC project, assuming the following information ($ in billions):

Acquisitions in 2019: $86

Revenue in 2020: $7.7

EBIT in 2020: $-4.5

Revenue in 2021: $11

EBIT in 2021: $-3.6

Revenue in 2022: $23

EBIT in 2022: $1.6

Sometime in 2022 based on the Acquisition Costs and Revenue forecasts

4.8 years

6.33 years

7.14 years

Impossible to tell. The cumulative EBIT is negative through 2022