Question: solve using excel and show how Problem 1: (30 points) (No credits for just answers without showing the work! So, show your work!) To establish
Problem 1: (30 points) (No credits for just answers without showing the work! So, show your work!) To establish a poultry processing you consider a $10 million investment. You have equity of $4 million and plan to borrow $6 million from Bank of America. The cost of debt is 8%, equity costs are 15% and the income/corporate tax is 12%. You expect the investment to generate before tax cash inflows of $2 million in year 1, $3 million in year 2, $4 million in year 3, $6 million in year 4, $6.5 million in year 5, and $7 million in year 6. 1. Calculate the Return to Asset (ROA) of this project. 2. Calculate the Return to Equity (ROE) of this project if you must repay the debt in equal payments by the end of the 6 year. 3. Is it a profitable project
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