Question
Use the Centralia Corp. Excel sheet (Centralia Corp.xls) on the class website to conduct the following sensitivity analysis. (a) Using the Excel sheet, compute the
Use the Centralia Corp. Excel sheet (Centralia Corp.xls) on the class website to conduct the following sensitivity analysis.
(a) Using the Excel sheet, compute the project NPV when the dollar borrowing rate is 7.9% and 8.1% by filling in the table below.
| $ borrowing rate | 7.9% | 8.1% |
| PV(after-tax OCF) | ||
| PV(Depreciation tax shield) | ||
| PV(Concessionary loan) | ||
| PV(Insert tax shield) | ||
| Freed-up restricted remittances | ||
| Initial investment | ||
| APV |
(b) What is the project value when the spot rate is $1.19/e?
(c) What is the project value when the spot rate is $1.21/e?
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Focus On Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert Hughes, Melissa Hart
6th Edition
125991965X, 978-1259919657
