A 6 - year project with the following information: Costs of buying fixed assets is 66 billion. Net working capital is 6 billioninvested in year 0. Annual revenue is 28 billion from the end of the first year. Annual costs excluding depreciation andinterest is 9 billion. Using the straight line method. The investor plans to borrow 70% of fixed assets capital investment,including 24 billion from commercial bank at an interest rate of 18% per year. The remaining will be borrowed from VDB.with interest rate of 10% per year. Priority for paying commercial bank. Requirements: Define the project's net cash flowsthat investors can use 100% of annual depreciation for paying principal.
A 6 - year project with the following information: Costs of buying fixed assets is 66 billion. Net working capital is 6 billioninvested in year 0. Annual revenue is 28 billion from the end of the first year. Annual costs excluding depreciation andinterest is 9 billion. Using the straight line method. The investor plans to borrow 70% of fixed assets capital investment,including 24 billion from commercial bank at an interest rate of 18% per year. The remaining will be borrowed from VDB.with interest rate of 10% per year. Priority for paying commercial bank. Requirements: Define the project's net cash flowsthat investors can use 100% of annual depreciation for paying principal.
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...
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A 6 - year project with the following information: Costs of buying fixed assets is 66 billion. Net working capital is 6 billioninvested in year 0. Annual revenue is 28 billion from the end of the first year. Annual costs excluding
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