Taco Bell has expected sales of $10 billion in one-year, gross profits are 30% of revenues, depreciation of 10% of reven
Posted: Wed Jul 06, 2022 6:41 pm
Taco Bell has expected sales of $10 billion in one-year, grossprofits are 30% of revenues, depreciation of 10% of revenues, andits tax rate is 20%. Suppose these revenues and costs will continueperpetually. If the cost of capital is 10%, compute the NPV of aninvestment by Bain Capital (a Private Equity Company) that proposesbuying Taco Bell for $25 billion? What is the payback period forthis investment?