Find the breakeven level of revenues/ Managerial Economics
A twenty year expansion project has a depreciable capital outlay of $50 million (straight line depreciation). It also has additional net working capital needs of $5 million. The project is expected to generate revenues of $30 million and expenses of $23 million during each year of the project. There is a debug expense of $3 million in the first year and a salvage value in year 20 is estimated to be $5 million. The tax rate is 30%. The WACC is 11.333%. What is the NPV? Find the IRR of the project. Determine the breakeven level of revenues.
