What are? facebook net cash flow under the lease? contract

Assignment Help Financial Management

Reference no: EM131620327

Facebook is considering two proposals to overhaul its network infrastructure. They have received two bids. The first bid from Huawei will require $18 million upfront investment and will generate $20 million in savings for Facebook each year for the next 3 years. The second bid from Cisco requires a $83 million upfront investment and will generate $60 million in savings each year for the next 3 years. a. What is the IRR for Facebook associated with each? bid? b. If the cost of capital for each investment is 17%?, what is the net present value (NPV?) for Facebook of each? bid?Suppose Cisco modifies its bid by offering a lease contract instead. Under the terms of the? lease, Facebook will pay $28 million? upfront, and $35 million per year for the next 33 years.? Facebook's savings will be the same as with? Cisco's original bid. c. Including its? savings, what are? Facebook's net cash flow under the lease? contract? What is the IRR of the Cisco bid? now? d. Is this new bid a better deal for Facebook than? Cisco's original? bid? Explain. a. What is the IRR for AOL associated with each? bid?

Reference no: EM131620327

Questions Cloud

Calculate the net proceeds to renee from the sale of debt : Renee’s Boutique, Inc., needs to raise $58.17 million to finance firm expansion. Calculate the net proceeds to Renee’s from the sale of the debt.

Expected return and the standard deviation of security : What is the expected return and the standard deviation of Security Y?

What range of discount rates should company accept project : A three-year project requires an initial investment of $500,000, Over what range of discount rates should the company accept the project?

Calculate the price of the stocks : Calculate the price of the following stocks. The required return is 8%. A. Stock A is expected to pay a dividend of $4.50 next year

What are? facebook net cash flow under the lease? contract : Facebook is considering two proposals to overhaul its network infrastructure. what are? Facebook's net cash flow under the lease? contract?

Which payment system helps the patient the most : Which payment system helps the patient the most?

What is deferred capital expenditure : Why is the capital expenditure budgeting process important to a company? What is deferred capital expenditure?

Impact on edmund earnings per share given year : Edmund Corporation recently made a large investment to upgrade its technology. Although these improvements won't have much of an impact on performance.

Consideration before making final decision : What non-financial information should Dinsmore take into consideration before making its final decision?

User Account

All Pages