Reto S.A.

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Reto S.A. Question 1: Since we are initially ignoring the effects of taxes and do not know the required return, (we initially know only that debt costs 8% but are not provided any information regarding equity costs) the only available option is to use either a non-time value based evaluation or the internal rate of return: |Cash Flow |Time | |Amount | | | | | | |Equipment Cost |0 |SFr |-600000 | | | | | | |Revenue |1-10 | |2000000…show more content…
|-600000 | | | | | |-600000.00 | |1 | |200000 |110000 |60000 |27000 |137000 |122321.43 | |2 | |200000 |110000 |60000 |27000 |137000 |109215.56 | |3 | |200000 |110000 |60000 |27000 |137000 |97513.89 | |4 | |200000 |110000 |60000 |27000 |137000 |87065.98 | |5 | |200000 |110000 |60000 |27000 |137000 |77737.48 | |6 | |200000 |110000 |60000 |27000 |137000 |69408.46 | |7 | |200000 |110000 |60000 |27000 |137000 |61971.84 | |8 | |200000 |110000 |60000 |27000 |137000 |55332.00 | |9 | |200000 |110000 |60000 |27000 |137000 |49403.57 | |10 | |200000 |110000 |60000 |27000 |137000 |44110.33 |

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