Question: Problem 7 . 1 It is proposed to set up a nitric acid plant based on Ostwald Process. The expected revenues and operating expenses in

Problem 7.1
It is proposed to set up a nitric acid plant based on Ostwald Process. The expected revenues and operating expenses in millions of dollars are presented below. The fixed capital investment for the plant is $50 million with a working capital of $7.5 million. Assume that all investments are made at time zero. Also, the present worth factor for cash flow in a year is (1+i)% Using MACRS depreciation schedule with a class life of 5 years, determine
d. The annual cash flows for all years
e. Net present worth using nominal discount rate of 15% for all years
f. The DCFR
\table[[\table[[Year],[1]],\table[[Annual revenue in million $ (si)],[7.0]],Annual operating expenses (without depreciation) in million $,(Gof)],[2,,4.0],[3,10.0,5.6],[4,15.0,6.8],[5,20.0,7.8],[6,22.5,8.8],[7,24.0,9.6],[,25.0,10.0]]
Problem 7 . 1 It is proposed to set up a nitric

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!