Iridium Satellite LLC, a mobile satellite-services provider, is considering spending $2 billion to u… Show more Iridium Satellite LLC, a mobile satellite-services provider, is considering spending $2 billion to upgrade its aging fleet of 66 satellites. The satellites will be ready for launch by 2013. Assume three satellites can be launched each month beginning in January of 2013 and payment per satellite ($30.3 million) is made upon launch. What is the present worth (end of December, 2007) of the upgrade if the interest rate is 12% compounded monthly? ANSWER: $984M The United Arab Emirates agreed to purchase six C-17 airlifter planes from Boeing for humanitarian operations. Four are to be delivered in 2011 and the remaining two in 2012. If the cost per plane is $210 million, paid upon delivery, and interest is 12% per year, what is the present worth of the contract (beginning of 2010) assuming end of year deliveries? ANSWER: $969B Chicago Bridge and Iron Co. received a $100 million contract to build a cryogenic gas-processing plant with capacity of 650 million cubic feet per day. Assume the facility operates for 250 days per year, generating revenues of $0.75 per 1000 cubic feet. If the revenue (price) is a time zero estimate and prices are expected to grow at 3.5% per year, what is the present value of 10 years of production assuming a market interest rate of 12% per year. (Production begins at time one. Assume annual, end of year cash flows.) ANSWER: $810M Rayong Refinery PCL signed a loan agreement for THB13.2 billion (Thai baht) from Thai Bank, Siam Commercial Bank, Government Savings Bank, and TMB Bank. If this loan is to be repaid with 10 semi-annual, equal principal payments, and the interest rate is 4.5% compounded semi-annually, how much interest is paid in the third payment? ANSWER: $238M A manufacturing firm intends to take a $100 million loan from the bank. The loan is to be paid back in quarterly payments of $3,983,619 over a 10-year period. The rate is a bit higher than the federal funds rate as the bank views this as a risky investment. What is the true cost (annual rate) of the loan? ANSWER: 10.4% • Show less