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Hi. For part (a), the maximum debt capacity of $300.6m is calculated by the sum of proportion of assets remaining ($201.6m) and the extra cash generated from the sale ($99m). However, the additional funds available to Nubo Co for new investments is $300.6m + $99m = $399.6m.
Please may I know why there is an additional of $99m which has already been included in the figure of $300.6m? What is the rationale of adding the $99m again?
Thank you.
The question asks for the total cash and debt funds that could be available
They have $99m in cash, and in addition can borrow $300.6. So a total available for investment of $399.6m
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