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Homework answers / question archive / market will be8%for the next 10 years, and that the risk free rate will be prigected to remain at4

market will be8%for the next 10 years, and that the risk free rate will be prigected to remain at4

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market will be8%for the next 10 years, and that the risk free rate will be prigected to remain at4.SoovchentiffoftherojeAtsummargitalatef2 Band thaany taxloss can be carried forward indefinitely. Therojecthavearioins/estmeredd soexam,blemachinery neededfor the orget costs $3 million and according to the tax authority, is depreciated using thstraight line method'over ten years. You can operate the machinery for 10 years. The pre- taxalyage valuathenachinadryendfthe yeaisexpectedole$300,00De purchase of the nachinery is made today. You also expect to inour additional capital expenditures of $1. 4illidonewompusquipmeDecember02 Thiequipment IS depreciatedg straightenethodancemainlifftheroject andnot tobe$20 expected to have any salvage value The revenues fromthe project are expected .Boper muroinsttartionDecember02, andrexpectegrowtaratef year. Labor is expected to cost approximately $12 million every year, while COGS are estimated to be 15%of revenues each year. Dayssales,. Thenet working capital required for the project is given by the following data outstanding Clay(subfa36 dayyc)andasechtironannual revenues, while ysaya boletstandiillge4 5day(subfa36dayyclanwill only be ofCOGS relevanta boostnoto COGSanythex pen)sleewentonitbe% each year. Assume net working capital is O as of today, and fully recovered by the enofthe argect (on December 31, 2030), Please forecast the free cash flows for the project. Please cultheveighteeracoso capitaltheroject Supposeeashowertoincrease Satthen oftheirsyear e December02 becausenan creaneevenuessyralother Information in the problemremains thesame (so Accounts Receivables will be based ortheewevenuPleaselvfoxx Quest 7points Qib Dumplings modissumestauddadiTheomparasotal debt outstand B@Gillidollaandhe osofdebt% Thedebinterest

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