Pretend your company won a license to build a U.S. cellular system (the application cost for the license was only $500!). Your license is to cover 140 square km. Assume a base station costs $500,000 and a MTSO costs $1,500,000. An extra $500,000 is needed to advertise and start the business. You have convinced the bank to loan you S6 million, with the idea that in four years you will have earned $10 million in gross billing revenues, and will have paid off the loan.
Pretend your company won a license to build a U.S. cellular system (the application cost for the license was only $500!). Your license is to cover 140 square km. Assume a base station costs $500,000 and a MTSO costs $1,500,000. An extra $500,000 is needed to advertise and start the business. You have convinced the bank to loan you S6 million, with the idea that in four years you will have earned $10 million in gross billing revenues, and will have paid off the loan.
Chapter25: Monopoly
Section: Chapter Questions
Problem 13E
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