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Please solve it in the provided Excel template. Thanks in advance! 1. Capital Budaeting...

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Finance

Please solve it in the provided Excel template. Thanks in advance!imageimage

1. Capital Budaeting Argo Airlines is looking to buy some gates at a West Coast airport. The key financial variables are below. Note that the gates revert back to the airport at the end of year 10. Note that any losses trigger tax benefits. Purchase Price $31M Yearly Revenue $15M Operating costs 51% of revenue Discount Rate 6% Gate Renovation (Fit-out Costs) $3M (in year 5) Revenue Inflator 2.0% Tax Rate 21% What are the NPV and IRR of the gates? Should Argo invest in them? Why or why not? Argo Airlines 1 2 Purchase price 3 Fit-out costs 4 Yearly revenue 5 Revenue inflator 6 Operating costs % of revenue) 7 Discount rate 8 Tax rate 9 10 Years Start 1 2 3 4 6 7 8 9 10 11 12 Investment 13 Revenues 14 Expenses 15 Income before tax 16 Taxes 17 Net income after tax 18 NPV 19 IRR 20 Insert text answer here

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