Southern Belle Inc.docx

# Southern Belle Inc.docx - Southern Belle Inc Case 2 1 2 3 4...

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Southern Belle Inc. Case 2 0 1 2 3 4 5 6 7 8 9 10 Purchase Price= \$20,00 0,000 Change in NWC= \$4,500, 000 Total Initial Invest \$24,50 0,000 Discount rate= 10% 10 Revenue s= \$75,000 ,000 \$77,25 0,000.0 0 \$79,567 ,500 \$81,95 4,525.0 0 \$84,413 ,161 \$86,94 5,555.5 7 \$89,553 ,922 \$92,24 0,539.9 1 \$95,007 ,756 \$97,85 7,988.7 9 Selling Price= \$50 \$51.50 \$53.05 \$54.64 \$56.28 \$57.96 \$59.70 \$61.49 \$63.34 \$65.24 Units sold= 1,500,0 00 1,500,0 00 1,500,0 00 1,500,0 00 1,500,0 00 1,500,0 00 1,500,0 00 1,500,0 00 1,500,0 00 1,500,0 00 Variable cost= \$52,500 ,000 \$54,07 5,000.0 0 \$55,69 7,250.0 0 \$57,36 8,167.5 0 \$59,08 9,212.5 3 \$60,86 1,888.9 0 \$62,68 7,745.5 7 \$64,56 8,377.9 3 \$66,50 5,429.2 7 \$68,50 0,592.1 5 Fixed cost= \$2,500, 000 \$3,000, 000 \$3,500, 000 \$4,000, 000 \$4,500, 000 \$5,000, 000 \$5,500, 000 \$6,000, 000 \$6,500, 000 \$7,000, 000 Total Cost= \$55,000 ,000 \$57,075 ,000 \$59,197 ,250 \$61,368 ,168 \$63,589 ,213 \$65,861 ,889 \$68,187 ,746 \$70,568 ,378 \$73,005 ,429 \$75,500 ,592 Operatio n Profit= \$20,000 ,000 \$20,17 5,000.0 0 \$20,370 ,250 \$20,58 6,357.5 0 \$20,823 ,948 \$21,08 3,666.6 7 \$21,366 ,177 \$21,67 2,161.9 7 \$22,002 ,327 \$22,35 7,396.6 4 Useful life yrs 10 10 10 10 10 10 10 10 10 10 Ann depreciat \$2,450, 000 \$4,410, 000 \$3,528, 000 \$2,822, 400.00 \$2,258, 900.00 \$1,805, 650.00 \$1,604, 750.00 \$1,604, 750.00 \$1,607, 200.00 \$1,604, 750.00 1

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ion (Marc) Taxable Income \$17,550 ,000 \$15,76 5,000.0 0 \$16,842 ,250 \$17,76 3,957.5 0 \$18,565 ,048 \$19,27 8,016.6 7 \$19,761 ,427 \$20,06 7,411.9 7 \$20,395 ,127 \$20,75 2,646.6 4 Tax Rate 40% 40% 40% 40% 40% 40% 40% 40% 40% 40% Tax \$7,020, 000 \$6,306, 000 \$6,736, 900 \$7,105, 583 \$7,426, 019 \$7,711, 207 \$7,904, 571 \$8,026, 965 \$8,158, 051 \$8,301, 059 EarningAf terT \$10,530 ,000 \$9,459, 000 \$10,105 ,350 \$10,658 ,375 \$11,139 ,029 \$11,566 ,810 \$11,856 ,856 \$12,040 ,447 \$12,237 ,076 \$12,451 ,588 Ann depreciat ion \$2,450, 000.00 \$4,410, 000 \$3,528, 000 \$2,822, 400.00 \$2,258, 900.00 \$1,805, 650.00 \$1,604, 750.00 \$1,604, 750.00 \$1,607, 200.00 \$1,604, 750.00 Proj Cash Flow (\$24,50 0,000) \$12,980 ,000.00 \$13,869 ,000.00 \$13,633 ,350.00 \$13,480 ,774.50 \$13,397 ,928.94 \$13,372 ,460.00 \$13,461 ,606.00 \$13,645 ,197.18 \$13,844 ,276.10 \$14,056 ,337.98 Ending book value \$803,60 0 Salvage = \$850,00 0 NPV= \$60,69 9,606.1 1 Tax Payable = 18560 IRR= 54% Change in
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