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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