Question: hi please helo me with a and b. please explain step by step The Spanish company ViscoMac Group S.A. is a company that operates fast

 hi please helo me with a and b. please explain step

hi please helo me with a and b. please explain step by step

The Spanish company ViscoMac Group S.A. is a company that operates fast food restaurants and it is considering producing packaged food for sale at grocery stores. The initial investment in production facilities to start this venture will be Euro 60 million, depreciable straight line over 10 years to a salvage value of Euro 10 million. The packaged food business is expected to generate revenues of Euro 100 million each year for the next 10 years and the EBITDA margin (EBITDA/revenues) is expected be 15% on these revenues. The working capital is expected to be 10 % of revenues, with the investment occurring at the start of each period, where needed. The cost of capital for ViscoMac is 12 % but the cost of capital for other firms in the packaged food business is 9 %. The marginal tax rate is 40 % A. Estimate the NPV of the investment. B. Now assume that you expect this business to continue in perpetuity, after year 10. Estimate the NPV of the investment today

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