Question: helpp show process on excel please A small municipality has announced the tender for the water conveyance, water distribution and waste water treatment network to
A small municipality has announced the tender for the water conveyance, water distribution and waste water treatment network to be privatised on BOT-Build Operate and Transfer basis for 20 years (which means the assets will be transferred back to the municipality free of charge). The investor should pay USD 560 million to acquire the company. The system is operating in a very inefficient fashion. After the transfer of the operating rights, the cash generation will start. Following the investments, the revenue will surge. The revamping and additional construction is projected in the first year and the cost breakdown is as follows: Pump option - China made USD 8 million Construction/Local Cost - USD 2 million expenses will be incurred The net cash revenue in the first year will be USD 14.000.000 and after the modernization the revenue is expected to increase by 20% every year. Calculate Net Present Value Note: Subtract the costs from the cash flow of the 1st year. The assets will be transferred back to the municipality free of charge at the end of 20th year. A small municipality has announced the tender for the water conveyance, water distribution and waste water treatment network to be privatised on BOT-Build Operate and Transfer basis for 20 years (which means the assets will be transferred back to the municipality free of charge). The investor should pay USD 560 million to acquire the company. The system is operating in a very inefficient fashion. After the transfer of the operating rights, the cash generation will start. Following the investments, the revenue will surge. The revamping and additional construction is projected in the first year and the cost breakdown is as follows: Pump option - China made USD 8 million Construction/Local Cost - USD 2 million expenses will be incurred The net cash revenue in the first year will be USD 14.000.000 and after the modernization the revenue is expected to increase by 20% every year. Calculate Net Present Value Note: Subtract the costs from the cash flow of the 1st year. The assets will be transferred back to the municipality free of charge at the end of 20th year
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