calculating project cash flows and npv

calculating project cash flows and npv - Variable Initial...

This preview shows page 1 - 4 out of 4 pages.

Variable Value Variable Value Initial capital expenditure $1,500,000 Revenue $720,000 Investment in NWC inventory $30,000 Cash Expen$1,530,000 Intial cash outlay $1,530,000 Depreciati $150,000 Life of the new production machine 10 years Tax rate 31% Salvage value $0.00 Depreciation expense $150,000 per year Units sold 9,000 units Sales price $110 per unit Variable cost of product $30 per unit Profit on product $80 per unit Total Unit profit per year $720,000 Fixed Costs per year $190,000 Interest payment $0 EBIT $530,000 Net income $258,750 Marginal tax rate 31% Required rate of return 15% NOPAT $178,537.50 Operating Cash Flow $365,700.00 293050 How 920750
Image of page 1
Project Revenue $990,000 Less: Fixed Expense ($190,000) Less: Variable Expenses ($270,000) Equals: Gross Profit $530,000 less: Depreciation ($150,000) Equals: Net Operating Income $380,000 Less: Taxes ($117,800) Equals: NOPAT $262,200 Plus: depreciation $150,000 Equals: Operating Cash Flow $412,200 Terminal Cash Flow final year $442,200
Image of page 2
Variable Value Initial capital expenditure $600,000 Life of the new trucks 5 years Salvage value (new trucks) $37,000 Salvage value (existing trucks) $23,000 5000 Marginal tax rate 25% Fuel use (existing trucks) $290,000 Fuel use (new trucks) $230,000
Image of page 3
Image of page 4

Want to read all 4 pages?

You've reached the end of your free preview.

Want to read all 4 pages?

  • Fall '08
  • HOYT
  • Finance, Generally Accepted Accounting Principles

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern