3-3c_sol - = Qualitative analysis or Short answer required...

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Given Investment cost (today) $(400,000) Project life 5 years Depreciation expense $80,000 Waste disposal cost savings per year $18,000 Labor cost savings per year $40,000 Sale of reclaimed waste $200,000 Required rate of return 20% Tax rate 35% Correlation (Year to year) in Proceeds from reclaimed waste 0.90 Solution c. Cash flow estimation 0 1 Investment $(400,000) Waste disposal cost savings per year $18,000 Labor cost savings per year 40,000 Proceeds from sale of reclaimed waste 200,000 EBITDA $258,000 Less: Depreciation (80,000) Additional EBIT $178,000 Less: Taxes (62,300) NOPAT $115,700 Plus: Depreciation 80,000 Less: Capex - Less: Additional working capital - FFCF (400,000) $195,700 NPV $185,263 IRR 39.74% Part i. PROBLEM 3-3c: Bridgeway Note: Your res here where yo fact, if you do n slightly from on Preferences/S
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Part ii. Part iii.
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Solution Legend = Value given in problem = Formula/Calculation/Analysis required
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Unformatted text preview: = Qualitative analysis or Short answer required = Goal Seek or Solver cell = Crystal Ball Input = Crystal Ball Output Year 2 3 4 5 $18,000 $18,000 $18,000 $18,000 40,000 40,000 40,000 40,000 200,000 200,000 200,000 200,000 $258,000 $258,000 $258,000 $258,000 (80,000) (80,000) (80,000) (80,000) $178,000 $178,000 $178,000 $178,000 (62,300) (62,300) (62,300) (62,300) $115,700 $115,700 $115,700 $115,700 80,000 80,000 80,000 80,000 - - - - - - - - $195,700 $195,700 $195,700 $195,700 Pharmaceuticals sults from the simulation experiment will differ slightly from those reported u did not use the same "seed" value for the random number generator. In not "fix" the same seed value for each simulation your results will differ ne simulation of the same problem to another (see Run ampling)....
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This note was uploaded on 07/24/2009 for the course FIN FIN taught by Professor Robbani during the Summer '09 term at University of Maryland Baltimore.

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3-3c_sol - = Qualitative analysis or Short answer required...

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