RWJ_CF10e_Chapter_06_student - Chapter 6 Problems 2 10 15 17 21 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers

RWJ_CF10e_Chapter_06_student - Chapter 6 Problems 2 10 15...

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Chapter 6 Problems 2, 10, 15, 17, 21 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-in" be installed in Excel. To install these, click on "Tools|Add-Ins" and select "Analysis ToolPak" and "Solver Add-In."
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Chapter 6 Question 2 Input area: Year 0 Year 1 Year 2 Year 3 Year 4 Investment Sales revenue Operating costs Depreciation - - - - Net working capital Tax rate Required return Output area: Sales $- $- $- $- Costs - - - - Depreciation - - - - EBT $- $- $- $- Tax - - - - Net income $- $- $- $- OCF - $- $- $- $- Capital spending $- - - - - NWC - - - - - Incremental cash flow $- $- $- $- $- NPV $-
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Chapter 6 Question 10 Input area: Techron I : Cost $850,000 Operating costs per year $10,000 Life 3 Techron II : Cost $1,000 Operating costs per year $500 Life 5 Both: Salvage value Tax rate Discount rate 9% *Depreciation straight-line Output area: Both cases: Aftertax salvage value $- Techron I: OCF $(10,000.00) NPV $(875,312.95) EAC $(345,796.54) Techron II: OCF $(500.00) NPV $(2,944.83) EAC $(757.09) The two milling machines have unequal lives, so they can only be compared by expressing both on an equivalent annual basis which is what the EAC method does.
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