Visby Rides, a limousine hire company, is considering buying some new luxury cars. After extensive research,...
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Visby Rides, a limousine hire company, is considering buying some new luxury cars. After extensive research, they come up with the below estimates of free cash flow from this project. Visby learns that a competitor is thinking of offering similar services, thus reducing Visby's sales. By how much could sales fall before the net preserit value (NPV) was zero, given that the opportunity cost of capital is 10%, and that cost of goods sold is 45% of revenues? Revenues -Cost of Goods Sold -Depreciation -EBIT -Taxes (30%) -Profit after tax +Depreciation -Change in NOWC -Capital Expenditures -Free Cash Flow Year 0 -300,000 Year 1 400 000 -180 000 -100 000 120 000 -36 000 84.000 100 000 -20 000 164 000 Year 2 400 000 -180 000 -100 000 120 000 -36 000 84 000 100 000 -20 000 164 000 Year 3 400 000 -180 000 -100 000 120 000 -36.000 8 000 100 000 -20 000 164 000 Visby Rides, a limousine hire company, is considering buying some new luxury cars. After extensive research, they come up with the below estimates of free cash flow from this project. Visby learns that a competitor is thinking of offering similar services, thus reducing Visby's sales. By how much could sales fall before the net preserit value (NPV) was zero, given that the opportunity cost of capital is 10%, and that cost of goods sold is 45% of revenues? Revenues -Cost of Goods Sold -Depreciation -EBIT -Taxes (30%) -Profit after tax +Depreciation -Change in NOWC -Capital Expenditures -Free Cash Flow Year 0 -300,000 Year 1 400 000 -180 000 -100 000 120 000 -36 000 84.000 100 000 -20 000 164 000 Year 2 400 000 -180 000 -100 000 120 000 -36 000 84 000 100 000 -20 000 164 000 Year 3 400 000 -180 000 -100 000 120 000 -36.000 8 000 100 000 -20 000 164 000
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Managing Business Ethics Making Ethical Decisions
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