Problem 11-02.xls - Capital Budgeting 1 2 3 4 5 6 7 8 9 10...

This preview shows page 1 - 2 out of 2 pages.

Capital Budgeting Problem 11-2 Single-Year Inputs New asset price $200,000 Ship. & install. Old salvage, t = 0 Life, n ≤ 20 8 Discount rate 14.00% Tax rate 40.00% CCA rate 30.00% New salvage, t = n Old salvage, t = n Multi-Year Inputs Year 0 1 2 3 4 5 6 7 8 9 ∆NOWC New revenues $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 Old revenues New operating costs $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 Old operating costs CCA Schedule Output Year 0 1 2 3 4 5 6 7 8 9 Starting UCC $0 $200,000 $170,000 $119,000 $83,300 $58,310 $40,817 $28,572 $20,000 $14,000 CCA $0 $30,000 $51,000 $35,700 $24,990 $17,493 $12,245 $8,572 $6,000 $4,200 Ending UCC $0 $170,000 $119,000 $83,300 $58,310 $40,817 $28,572 $20,000 $14,000 $9,800 Cash-Flow Outputs Year 0 1 2 3 4 5 6 7 8 9 ∆Revenues $0 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $90,000 $0 $0 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $0 ∆Net revenues $0 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $0 $0 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $0 ∆A-T net revenues $0 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $0 ∆CCA tax shield $0 $12,000 $20,400 $14,280 $9,996 $6,997 $4,898 $3,429 $2,400
Image of page 1

Subscribe to view the full document.

Image of page 2
You've reached the end of this preview.
  • Winter '15
  • RobertB

{[ 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