6. Calculate the net present value of the project assuming a sale in Year 10.7. Calculate the internal rate of return.Complete the following problems using the information given below:Total Project Cost:Lender Standards:$50,000,000Interest Rate:9%Amortization Rate:20 yrsDebt service coverage ratio:Debt to cost ratio:1.2570%o Projected annual cash flow of project:Investors' Hurdle Rate:$4,250,00012%Tax Rate:30%o Cap RateSale in Year 109%O O 0 0 O

Capital budgeting techniques are the decision making tools which helps the companies in making…

Complete the following problems using the information given below: o Total Project Cost: o Lender Standards: $50,000,000 Interest Rate: 9% Amortization Rate: 20 yrs Debt service coverage ratio: 1.25 Debt to cost ratio: 70% o Projected annual cash flow of project: Investors' Hurdle Rate: $4,250,000 12% Tax Rate: 30% Cap Rate Sale in Year 10 9%

Complete the following problems using the information given below: o Total Project Cost: o Lender Standards: $50,000,000 Interest Rate: 9% Amortization Rate: 20 yrs Debt service coverage ratio: 1.25 Debt to cost ratio: 70% o Projected annual cash flow of project: Investors' Hurdle Rate: $4,250,000 12% Tax Rate: 30% Cap Rate Sale in Year 10 9%

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter10: Capital Budgeting: Decision Criteria And Real Option

Section: Chapter Questions

Problem 21P

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