Question

Argentina is considering constructing a bridge across the Rio de La Plata to connect its Northern...

Argentina is considering constructing a bridge across the Rio de La Plata to connect its Northern coast to the Southern coast of Uruguay. If this bridge is constructed, it will reduce the travel time from Buenos Aires, Argentina to Sao Paulo, Brazil by over 10 hours, and has the potential to significantly improve the flow of manufactures goods between the two countries. The cost of the new bridge, which will be longest bridge in the world and span over 50 miles, will be $700 million. The bridge will require an annual maintenance of $10 million for repairs and upgrades, and is estimated to last 80 years. It is estimated that 550,000 vehicles will use the bridge during the first year of operation, and an additional 50,000 vehicles per year until the 10th year. These data are based on a toll charge of $90 per vehicle. The annual traffic for the remainder of the life will be 1,000,000 vehicles per year. The government requires a minimum rate of return of 15% in order to process with the project.

Would the decision change if they have to borrow up to 80 percent of the cost at 6 percent interest rate from the World Bank (paid in annual payments over 50 year period)? What is your return on equity (ROE)? What is your return on investment (ROI) now?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
** Note ** Execute the following query before completing steps 1 and 2: INSERT INTO Employees...
** Note ** Execute the following query before completing steps 1 and 2: INSERT INTO Employees (LastName, FirstName, BirthDate, Notes) VALUES ('Smith','Mary','1980-10-15','John is a student at Nashville State.'); 1. Using the record you just created in the Note above, write a query to update the LastName field to Jones. 2. Using the record you just created in the Note above, write a query to delete that record. 3. Write a query using the Products table that will return the sum...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind...
Argentina and Ecuador: Understanding the Currency Crisis While fiscal policy is never far from the mind of your average Argentine, who remembers the tough times and hyperinflation of the 1980s, the events of 2001 and 2002 have brought fiscal policy back to the forefront of public concern. Though the early 1990s may have been characterized by financial optimism, Argentina has been in a recession since Brazil's 1998 monetary crisis sent shockwaves across the regional and global markets. In early 2002,...
Please show me how to apply CVP analysis for this case study. FLY ASH BRICK PROJECT:...
Please show me how to apply CVP analysis for this case study. FLY ASH BRICK PROJECT: FEASIBILITY STUDY USING CVP ANALYSIS S. K. Mitra and Shubhra Hajela wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be transmitted, photocopied, digitized or otherwise reproduced in any...
In February 2012, the Pepsi Next product was launched into the US market. This case study...
In February 2012, the Pepsi Next product was launched into the US market. This case study provides students with an interesting insight into PepsiCo’s new product process and some of the challenging decisions that they faced along the way. Pepsi Next Case Study Introduction Pepsi Next was launched by PepsiCo into the US market in February 2012, and has since been rolled out to various international markets (for instance, it was launched in Australia in September 2012). The new product...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how...
Delta airlines case study Global strategy. Describe the current global strategy and provide evidence about how the firms resources incompetencies support the given pressures regarding costs and local responsiveness. Describe entry modes have they usually used, and whether they are appropriate for the given strategy. Any key issues in their global strategy? casestudy: Atlanta, June 17, 2014. Sea of Delta employees and their families swarmed between food trucks, amusement park booths, and entertainment venues that were scattered throughout what would...