3-1sol - Breakeven Year 1 EBITDA $233,551 PROBLEM 3-1:...

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Given EBITDA (Year 1) $200,000 Growth Rate in EBITDA 5% Initial investment $800,000 Depreciation (Straight line) over 5 years Estimated salvage value $- Tax rate 35% Cost of capital 12% Solution a. 0 1 2 EBITDA $200,000 $210,000 Less: Depreciation Expense (160,000) (160,000) EBIT $40,000 $50,000 Less: Taxes (14,000) (17,500) NOPAT $26,000 $32,500 Plus: Depreciation Expense 160,000 160,000 Less: CAPEX (800,000) - - Less: Change in Working Capital - - - PFCF $(800,000) $186,000 $192,500 b. NPV $(85,926) c. Using "Goal Seek" to solve for the EBITDA in year 1 (C5) that yields a NPV of 0 (C28).
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Unformatted text preview: Breakeven Year 1 EBITDA $233,551 PROBLEM 3-1: Clayton Manufactur Solution Legend = Value given in problem = Formula/Calculation/Analysis required = Qualitative analysis or Short answer required = Goal Seek or Solver cell = Crystal Ball Input = Crystal Ball Output Years 3 4 5 $220,500 $231,525 $243,101 (160,000) (160,000) (160,000) $60,500 $71,525 $83,101 (21,175) (25,034) (29,085) $39,325 $46,491 $54,016 160,000 160,000 160,000 - - - - - - $199,325 $206,491 $214,016 ring Company...
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3-1sol - Breakeven Year 1 EBITDA $233,551 PROBLEM 3-1:...

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