Pretend your company won a license to build a U.S. cellular system (the application cost for thelicense was only $500!). Your license is to cover 140 square km. ASsume a base station costs$500,000 and a MTSO costs $1,500,000. An extra $500,000 is needed to advertise and start thebusiness. You have convinced the bank to loan you $6 million, with the idea that in four years youwill have earned S10 million in gross billing revenues, and will have paid off the loan.(a) How many base stations (i.e., cell sites) will you be able to install for $6 million?(b) Assuming the earth is flat and subscribers are uniformly distributed on the ground, whatassumption can you make about the coverage area of each of your cell sites? What is the majorradius of each of your cells, assuming a hexagonal mosaic?(c) Assume that the average customer will pay $50 per month over a four-year period. Assume thaton the first day you turn your system on, you have a certain number of customers which remainsfixed throughout the year. On the first day of each new year, the number of customers using yoursystem doubles and then remains fixed for the rest of that year. What is the minimum number ofcustomers you must have on the first day of service in order to have earned $10 million in grossbilling revenues by the end of the 4th year of operation?(d) For your answer in (c), how many users per square km are needed on the first day of servicein order to reach the $10 million mark after the 4th year?

Answered: Image /qna-images/answer/80414ed4-6922-4d0a-890e-ec1423326957.jpg

Pretend your company won a license to build a U.S. cellular system (the application cost for the license was only $500!). Your license is to cover 140 square km. Assume a base station costs $500,000 and a MTSO costs $1,500,000. An extra $500,000 is needed to advertise and start the business. You have convinced the bank to loan you S6 million, with the idea that in four years you will have earned $10 million in gross billing revenues, and will have paid off the loan.

Pretend your company won a license to build a U.S. cellular system (the application cost for the license was only $500!). Your license is to cover 140 square km. Assume a base station costs $500,000 and a MTSO costs $1,500,000. An extra $500,000 is needed to advertise and start the business. You have convinced the bank to loan you S6 million, with the idea that in four years you will have earned $10 million in gross billing revenues, and will have paid off the loan.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

3. You just inherited P1,000,000. While you plan to squander some of it away, how much should you deposit in an account earning 5% interest per year if you would like to have P1,000,000 in the account in 10 years?
Q.2. How many years will it take to triple your investment of $5,000 if it has an interest rate of 10% compounded annually? Q.3. If you want to withdraw $10,000 at the end of two years and $20,000 at the end of four years, how much should you deposit now into an account that pays 10% interest compounded annually?
Your bank pays 2.6% interest per year You put S1,400 in the bank today and $550 more in the bank in one year How much will you have in the bank in two years? In two years, the amount that you will have is s (Round to the nearest cent)
Suppose the interest rate is 10%. If $100 is invested at this rate today, how much will it be worth after one year? After two years? After five years? What is the value today of $100 paid one year from now? Paid two years from now? Paid five years from now?
You plan to purchase a $310,000 house using a 15-year mortgage obtained from your bank. The mortgage rate offered to you is 5.10 percent. You will make a down payment of 20 percent of the purchase price. Calculate your monthly payments oni this mortgage. $1.922.34 $1.411.17 $1,974.11 $1.74191 None is the correct answer
After graduation, you face a choice. One option is to work for a multinational consulting firm and earn a starting salary (benefits included) of $40,000. The other option is to use $6,000 in savings to start your own consulting firm. You could earn an interest return of 5 percent on your savings. You choose to start your own consulting firm. At the end of the first year, you add up all of your expenses and revenues. Your total includes $9,000 in rent, $850 in office supplies, $18,000 for office staff, and $3,500 in telephone expenses. Your explicit costs are $ Your implicit costs are $
You need $15,000 for a new car. If you can deposit $10,000 today into an account that pays annual interest rate of 5.5% compounded annually, how long it will take for you to be able to buy the new car? ***Stuck at 5000=1.055n Please show work. Don't show me the calculator steps because I don't have the right calculator.
Wow and beautiful expert Hand written solution is not allowed
James has been working as a Mechanical Engineer ever since he graduated five years ago. Two years ago, he bought and financed a new $25,000 Jeep Compass and still owes $15,750 on his car loan. He has never been late with a car payment. James has one major credit card, with a $1,000 limit. He has had it since his senior year of college and was two months late with a payment one time during that first year. He is currently carrying a balance of $600 on this card. In the last year, James applied for six store credit cards at places that he shops a lot so that he can earn points and get discounts. He carries no balances Part 1: Calculate James’ credit score. Recalculate his credit score if he had not opened the six store credit cards. Part 2: James is tired of paying rent and would like to purchase a condo so that he can start building equity in his home. He is looking for a 30-year mortgage to purchase a $240,000 condo. What interest rate does James qualify for on a mortgage with his…
How much should I deposit in a trust now (time zero) if it has to yield $100,000 at time zero, $25,000 in years 1 through 5, $50,000 per year from year 6 in perpetuity. Interest rate is 5%. Verify your answers using excel. Hint: Perpetuity means your principal stays the same, you are just generating interest which you withdraw. How much money should you have at the end of year 5 so that you generate 50,000 per year interest?
You borrowed $10,000 from a local bank, with the agreement that you will pay back the loan according to a graduated payment plan. If your first payment is set at $1,500, what would the remaining payment look like at a borrowing rate of 7% over five years? (the value of G approximately is...) $10,000 0 $1.500 20 30 4G
You save $1500 a year into a 401(k) account that you invest in a mutual fund earning 7% per year. You plan to retire in 25 years. How much money will you have in your account at retirement? Your Answer: