Motorola Mobility LLC is a company that develops mobile devices. Headquartered in Chicago, Illinois, United...
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Motorola Mobility LLC is a company that develops mobile devices. Headquartered in Chicago, Illinois, United States, the company was formed on January 4, 2011 by the split of Motorola Inc. into two separate companies; Motorola Mobility took on the company's consumer-oriented product lines, including its mobile phone business and its cable modems and set-top boxes for digital cable and satellite television services, while Motorola Solutions retained the company's enterprise-oriented product lines. Early 2012, Google decided to purchase Motorola mobility LLC for $12.5b. Google had a plan to keep Motorola mobility for 5 years. Google financial analysis team made the following forecasts:
Year
Cash flow(in billions)
Net income (in billions)
2012
1.5
1
2013
2.5
2
2014
4
3
2015
3
2
2016
6 (includes 3.5b selling price)
1.5
And that the average book value of asset is $8b and Googles required rate of return is its WACC.
7- Calculate payback period USING EXCEL. If you know that google accepts projects with 4 years payback period. Would you accept that project?
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