More realistic forecasts of revenues and costs

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Unformatted text preview: s. More realistic forecasts of revenues and costs. Company’s ability to use tax shields. Opportunity cost of capital. c. The table on the next page shows a sample NPV analysis for the project. The analysis is based on the following assumptions: 1. Inflation: 10% per year. 2. Capital Expenditure: $8 million for machinery; $5 million for market value of factory; $2.4 million for warehouse extension (we assume that it is eventually needed or that electric motor project and surplus capacity cannot be used in the interim...
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This document was uploaded on 02/02/2014.

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