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Author Question: Use the table for the question(s) below.Year 0Year 1Year 2Year 3Revenues400,000400,000400,000-Cost ... (Read 217 times)

fagboi

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on: Jul 9, 2019
Use the table for the question(s) below.

Year 0Year 1Year 2Year 3
Revenues400,000400,000400,000
-Cost of Goods Sold-180,000-180,000-180,000
​
-Depreciation-100,000-100,000-100,000
=EBIT120,000120,000120,000
​
-Taxes (35%)-42,000-42,000-42,000
=Unlevered net income78,00078,00078,000
​
+Depreciation100,000100,000100,000
​
-Additions to Net Working Capital-20,000-20,000-20,000
​
-Capital Expenditures-300,000
=Free Cash Flow158,000158,000158,000
​


Visby Rides, a livery car company, is considering buying some new luxury cars. After extensive research, they come up with the above estimates of free cash flow from this project. By how much could the discount rate rise before the net present value (NPV) of this project is zero, given that it is currently 10%?
◦ by 22%
◦ by 17%
◦ by 27%%
◦ by 25%
Fundamentals of Corporate Finance ¦ Berk, DeMarzo, Harford ¦ 2nd Edition
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Marked as best answer by fagboi on Jul 9, 2019

izzat

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Reply #1 on: Jul 9, 2019
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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yuanxiao zheng

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Reply #2 on: Apr 22, 2020
thank you


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