Question
In: Finance
You own a fleet of food trucks. You are thinking about borrowing $2,045,039 for 10 years...
You own a fleet of food trucks. You are thinking about borrowing $2,045,039 for 10 years at 0.06 to upgrade the stove tops in your trucks. This upgrade has an unlevered NPV of 241,095. The terms of this loan require you to add GPS trackers to your trucks, which will cost you $22,949, and $5,793 per year for the next 10 years. Your tax rate is 0.34. You have little use for the GPS trackers, and would not have purchased them if the loan covenants did not require them. What is the NPV of this upgrade if you take take the loan?
Solutions
jeff jeffy answered 2 years agoRelated Solutions
You own a fleet of food trucks. You are thinking about borrowing $2,496,626 for 10 years...
You own a fleet of food trucks. You are thinking about borrowing
$2,496,626 for 10 years at 0.06 to upgrade the stove tops in your
trucks. This upgrade has an unlevered NPV of 302,555. The terms of
this loan require you to add GPS trackers to your trucks, which
will cost you $24,608, and $8,642 per year for the next 10 years.
Your tax rate is 0.23. You have little use for the GPS trackers,
and would not have purchased...
You own a fleet of food trucks. You are thinking about borrowing $2,118,992 for 10 years...
You own a fleet of food trucks. You are thinking about borrowing
$2,118,992 for 10 years at 0.05 to upgrade the stove tops in your
trucks. This upgrade has an unlevered NPV of 356,960. The terms of
this loan require you to add GPS trackers to your trucks, which
will cost you $27,539, and $6,408 per year for the next 10 years.
Your tax rate is 0.31. You have little use for the GPS trackers,
and would not have purchased...
You own a fleet of food trucks. You are thinking about borrowing $2,367,487 for 10 years...
You
own a fleet of food trucks. You are thinking about borrowing
$2,367,487 for 10 years at 0.07 to upgrade the stove tops in your
trucks. This upgrade has an unlevered NPV of 342,464. The terms of
this loan require you to add GPS trackers to your trucks, which
will cost you $20,414, and $7,903 per year for the next 10 years.
Your tax rate is 0.24. You have little use for the GPS trackers,
and would not have purchased...
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business. You have talked to many customers who have suggested a
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friendly service, and...
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