AMZ Corp receives a contract to build a tolled-highway from Skudai to Pontian. The highway is...

 

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AMZ Corp receives a contract to build a tolled-highway from Skudai to Pontian. The highway is considered a project that can give perpetual toll rever evenue to AMZ Corp. However, AMZ Corp needs to make an initial investment of RM 50,000,000 now. Once the tolled-highway is completed (in year 5), AMZ Corp needs to spend about RM 10,000 every year to maintain it. In addition, every five year, AMZ Corp needs to carry out resurfacing works at RM 500,000. AMZ Corp expects to receive toll collection of RM 2,000,000 every year from the highway. If the growth rate is estimated at 10% per annum, determine if the tolled-highway can give profit to AMZ Corp. AMZ Corp receives a contract to build a tolled-highway from Skudai to Pontian. The highway is considered a project that can give perpetual toll rever evenue to AMZ Corp. However, AMZ Corp needs to make an initial investment of RM 50,000,000 now. Once the tolled-highway is completed (in year 5), AMZ Corp needs to spend about RM 10,000 every year to maintain it. In addition, every five year, AMZ Corp needs to carry out resurfacing works at RM 500,000. AMZ Corp expects to receive toll collection of RM 2,000,000 every year from the highway. If the growth rate is estimated at 10% per annum, determine if the tolled-highway can give profit to AMZ Corp.

Answer rating: 100% (QA)

Answer The tolledhighway can give profit to AMZ Corp Initial investment RM 50000000 Annual maintenan... View the full answer