Find the breakeven level of revenues


Problem: A 20 year expansion project has a depreciable capital outlay of $50 million (straight line depreciation). It also has additional net working capital needs of $5 million. The project is expected to generate revenues of $30 million and expenses of $23 million during each year of the project. There is a debug expense of $3 million in the first year and a salvage value in year 20 is estimated to be $5 million. The tax rate is 30%. The WACC is 11.333%. What is the NPV? Find the IRR of the project. Find the breakeven level of revenues.

Solution Preview :

Prepared by a verified Expert
Managerial Economics: Find the breakeven level of revenues
Reference No:- TGS01751474

Now Priced at $20 (50% Discount)

Recommended (92%)

Rated (4.4/5)