You are considering a project with the following financial data: Required initial investment at n = 0: $50M Project life: 10 years Estimated annual revenue: $X (unknown) Estimated annual operating cost: $15M Required minimum return: 20% per year Salvage value of the project: 15% of the initial investmentWhat minimum annual revenue (in $M) must be generated to make the project worthwhile?(a) X = $26.64M(b) X = $28.38M(c) X = $32.47M(d)X = $35.22M
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You are considering a project with the following financial data:
- Required initial investment at n = 0: $50M
- Project life: 10 years
- Estimated annual revenue: $X (unknown)
- Estimated annual operating cost: $15M
- Required minimum return: 20% per year
- Salvage value of the project: 15% of the initial investment
What minimum annual revenue (in $M) must be generated to make the project worthwhile?
(a) X = $26.64M
(b) X = $28.38M
(c) X = $32.47M
(d)X = $35.22M
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