Inflation Demo - 11,386 25,079 0.8227 20,633 5 38,288-8,000...

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Cost: $100,000.00 Salvage: $20,000.00 Maint ($/yr): $5,000.00 Revenue ( $/yr): $35,000.00 Tax Rate: 40.00% Inflation rate: 5.00% End of Actual $ Actual $ Inc Tax Actual $ Real $ Real $ Year BTCF Deprec Taxable Inc at 40% ATCF Adj Factor ATCF 0 -100,000 0 0 0 -100,000 0 -100,000 1 31,500 -8,000 23,500 9,400 22,100 0.9524 21,048 2 33,075 -8,000 25,075 10,030 23,045 0.9070 20,902 3 34,729 -8,000 26,729 10,692 24,037 0.8638 20,764 4 36,465 -8,000 28,465 11,386 25,079 0.8227 20,633 5 38,288 -8,000 30,288 12,115 26,173 0.7835 20,507 6 40,203 -8,000 32,203 12,881 27,322 0.7462 20,388 7 42,213 -8,000 34,213 13,685 28,528 0.7107 20,274 8 44,324 -8,000 36,324 14,529 29,794 0.6768 20,166 9 46,540 -8,000 38,540 15,416 31,124 0.6446 20,063 10 48,867 -8,000 40,867 16,347 32,520 0.6139 19,965 10 32,578 12,578 5,031 27,547 0.6139 16,911 End of Actual $ Actual $ Inc Tax Actual $ Real $ Real $ Year BTCF Deprec Taxable Inc at 40% ATCF Adj Factor ATCF 0 -100,000 0 0 0 -100,000 0 -100,000 1 31,500 -8,000 23,500 9,400 22,100 0.9524 21,048 2 33,075 -8,000 25,075 10,030 23,045 0.9070 20,902 3 34,729 -8,000 26,729 10,692 24,037 0.8638 20,764 4 36,465 -8,000 28,465
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Unformatted text preview: 11,386 25,079 0.8227 20,633 5 38,288 -8,000 30,288 12,115 26,173 0.7835 20,507 6 40,203 -8,000 32,203 12,881 27,322 0.7462 20,388 7 42,213 -8,000 34,213 13,685 28,528 0.7107 20,274 8 44,324 -8,000 36,324 14,529 29,794 0.6768 20,166 9 46,540 -8,000 38,540 15,416 31,124 0.6446 20,063 10 81,445 -8,000 53,445 21,378 60,067 0.6139 36,876 Internal Rate of Return of Actual $ cash flow: 22.74% Internal Rate of Return of Real $ cash flow: 16.89% Note: All of the costs and revenues listed below are in base year dollars. The revenues, expenses and salvage value are expected to increase at the inflation rate. Internal Rate of Return Calculations: In order to take advantage of the Excel IRR function, it will be necessary to use a cash flow table where every entry is equally spaced. To do this we must combine the Year 10 cash flows as shown below...
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