ON 20th February 2020, Whiz Telecoms obtained a license from ZICTA to operate a mobile cellular business. The project will be carried out by a special purpose vehicle in which Whiz owns 75% of the equity and the 25% is held by Unilus. The project requires an outlay of K50 billion of which K10 billion will come from equity contribution by the sponsors. The balance of K40 billion will be raised through syndicated loan. The SPV therefore intends to carry out a cash flow analysis to determine the financial viability of this project. Required: Describe the important factors that the SPV should consider in carrying out a cash flow analysis.
ON 20th February 2020, Whiz Telecoms obtained a license from ZICTA to operate a mobile cellular business. The project will be carried out by a special purpose vehicle in which Whiz owns 75% of the equity and the 25% is held by Unilus. The project requires an outlay of K50 billion of which K10 billion will come from equity contribution by the sponsors. The balance of K40 billion will be raised through syndicated loan. The SPV therefore intends to carry out a cash flow analysis to determine the financial viability of this project.
Required:
Describe the important factors that the SPV should consider in carrying out a cash flow analysis.
Given information,
Equity proportion: 
Debt proportion: 
Initial investment: 
billion
Initial investment from equity: 
billion
Initial investment from debt: 
billion
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