given the cash flow information calculate project s borrowing capacity

Borrowing capacity assignment:

Using the following data, calculate the borrowing capacity and the feasible debt ratio for a project which has a capital investment plan of $800 million.

Cost of debt: 6%

Cash flow coverage ratio α = 1.5

Ten-year operating cash flows:

Year

Operating CF

1

$22.21

2

$23.29

3

$24.43

4

$25.65

5

$26.94

6

$28.31

7

$29.76

8

$31.30

9

$32.93

10

$34.66