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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 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.

Intermediate Financial Management (MindTap Course List)
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter12: Capital Budgeting: Decision Criteria
Section: Chapter Questions
Problem 1P: A project has an initial cost of 40,000, expected net cash inflows of 9,000 per year for 7 years,...
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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 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.

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