Sir,

i have solved this ques...Assume that a project's expected return is $180 million in 5 years for an initial investment of $100 million? How much debt should this project take to get a 110% ROI after debt payback? Assume 10% interest on the debt....my answer is different from the one that is given in the option. please give the correct method to solve this question.

thank you

i have solved this ques...Assume that a project's expected return is $180 million in 5 years for an initial investment of $100 million? How much debt should this project take to get a 110% ROI after debt payback? Assume 10% interest on the debt....my answer is different from the one that is given in the option. please give the correct method to solve this question.

thank you

Apr 29 2013 03:03 PM

So if you invested $100mn (50 equity + 50 debt) and got back $180mn.

Then ROI = (180'returns'-50'debt'-25'interest'-50'equity)/50'equity' = 110%

May 02 2013 12:40 PM
Then ROI = (180'returns'-50'debt'-25'interest'-50'equity)/50'equity' = 110%