calculating project cash flows and npv prob

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

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

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