Question: You are a project analyst at PMD Ghana Ltd , a bus operator interested in biddingfor a public transport project of a city government in
You are a project analyst at PMD Ghana Ltd a bus operator interested in biddingfor a public transport project of a city government in a South Asian country. Theproject requires PMD Ghana Ltd to operate buses in the publicprivatepartnership system on designated routes. The company has to invest busesin the project, each costing $ and operate it for five years. The total initialinvestment outlay is expected to be $ million. The project has no salvage value.The city government has guaranteed to apply each bus for at least kilometres at $ per kilometre. The companys variable costs are $ perkilometre, and its fixed costs are $ annually. The riskfree rate is and the companys risk analyst has worked out the project beta to be Returnon the broad market is The weighted average cost of capital of the companyis The country has offered a total tax exemption. You are to assess the projecteconomic viability and its sustainability in terms impact to the companyoperations
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