Question: Hide Assignment Information please provide excel with explanation Company ABC is looking at doing the below project. which is expected to have the below first

Hide Assignment Information

please provide excel with explanation

Company ABC is looking at doing the below project. which is expected to have the below first year financials, Net working capital is paid at time zero.

Revenue: $58 million

EBITDA: $14 million

Depreciation & Amortization: $2.5 million

CapEx: $2 million

Net Working Capital: $7 million

Tax Rate: 30%

It is expected that over 10 years the EBITDA margin will increase by 0.4% a year while depreciation, CapEx and Net working capital will remain a constant % of sales. Revenue will grow by 3% a year.

After 10 years of business the project will be finished and Net Working Capital returned.

If your required rate of return is 11% at what initial cost would you accept the project?

Provide a spreadsheet to support your calculations and provide a short explanation of your decision and findings in the same spreadsheet, 4-6 sentences should be sufficient. Ensure the spreadsheet allows me to adjust growth, EBITDA margin and required rate of return assumptions to see the updated NPV and IRR.

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