Question: Oracle is considering a cloud infrastructure expansion with the following financial details: Initial Investment: $1.8 billion Estimated Annual Revenue: $900 million Operating Costs: $500 million

  • Oracle is considering a cloud infrastructure expansion with the following financial details:
    • Initial Investment: $1.8 billion
    • Estimated Annual Revenue: $900 million
    • Operating Costs: $500 million annually
    • Depreciation Expense: $100 million annually
    • Tax Rate: 20%
  • Requirements:
    1. Calculate the annual net income from the cloud infrastructure expansion.
    2. Prepare a financial projection for five years.
    3. Analyze the payback period for the initial investment.
    4. Discuss the strategic benefits of the cloud infrastructure expansion.
    5. Evaluate the potential technological and market risks.

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