FinalTemplate

# FinalTemplate - Initial Working Capital Length of Project...

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Initial Working Capital \$100,000.00 Length of Project 5 years Inflation Rate 3% MARR 20% Year 0 1 2 3 4 Capital \$(100,000) \$(3,000) \$(6,090) \$(9,273) \$(12,551) NPV \$(112,125) Initial Working Capital \$100,000.00 Length of Project 5 years Inflation Rate 6% MARR 20% Year 0 1 2 3 4 Capital \$(100,000) \$(6,000) \$(12,360) \$(19,102) \$(26,248) NPV \$(119,197) Inflation Rate NPV Prob Expected Value 3% \$(112,125) 70% \$(78,488) 6% \$(119,197) 30% \$(35,759) Combined \$(114,247)

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5 \$14,986 =((-12551)+((-12551-100000)*D3))-(SUM(C8:F8)) =((-26248)+((-26248-100000)*D14))-(SUM(C19:F19)) 5 \$45,036
Investment 55000 Tax Rate 15% MACRS 3 n 4 MARR 20% Inflation 4% Year 0 1 2 3 4 Income 0 40000 40000 40000 Expenses 20000 20800 21632 22497 23397 Depreciation 18332 24448 8146 4076 Taxable Income -39132 -6080 9357 12527 Income Tax -5870 -912 1404 1879 Net Income -33262 -5168 7954 10648 Salvage 32000 Tax (Gain/Loss) -4800 Cash Flow -55000 -14930 19280 16099 41924 NPV -\$24,519

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Year 3 5 7 10 15 20 200 200 200 200 150 150 1 33.33 20 14.29 10 2 44.45 32 24.49 18 3 14.81 19.2 17.49 14.4 4 7.41 11.52 12.49 11.52 5 11.52 8.93 9.22 6 5.76 8.92 7.37 7 8.93 6.55 8 4.46 6.55 9 6.56 10 6.55 11 3.28
Withdrawal in first year to match the current \$50000 in 2046 dollars and taxes \$320,068 =50000*(1+0.04)^40/(0.75) At age 65, you'd have A(F/A,8%,4 Rate of 4% Inflation but also earn 8% \$4,349,829 =-PV(4%,20,A2) So our annual saving = \$4,349,829 /259.0565 \$16,791

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40) = 259.0565A
Tax Rate MARR 15% MACRS 3 Investment \$60,000 Year \$0 \$1 \$2 \$3 Income \$27,000 \$28,000 \$29,000 Depreciation \$19,998 \$26,670 \$8,886 Taxable Income \$7,002 \$1,330 \$20,114 Income Taxes \$1,050 \$200 \$3,017 Cash Flow Net Income \$5,952 \$1,131 \$17,097 Depreciation \$19,998 \$26,670 \$8,886 Investment (\$60,000) Net Cash (\$60,000) \$25,950 \$27,801 \$25,983 NPV (\$37,435) (\$16,414) \$670

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33.33 44.45 \$4 \$5 14.81 \$30,000 \$31,000 7.41 \$4,446 \$0 \$25,554 \$31,000 \$3,833 \$4,650 \$21,721 \$26,350 \$4,446 \$0 \$26,167 \$26,350 \$15,631
Cost Basis 100000 Type 3 MACRS Income Tax Rate 15% MARR 12% Year 0 1 2 3 Income Statement Inflation Rate Revenues \$0 \$50,000 \$50,000 Expense \$25,000 \$25,000 \$25,000 Depreciation \$33,330 \$44,450 \$14,810 Taxable Income -\$58,330 -\$19,450 \$10,190 Income Taxes -\$8,750 -\$2,918 \$1,529 Net Income -\$49,581 -\$16,533 \$8,662 Cash Flow Statement Operating Activity Net Income -\$49,581 -\$16,533 \$8,662 Depreciation \$33,330 \$44,450 \$14,810 Investment Activity Investment -\$100,000 Salvage Gains Tax Financial Activities Net Cash Flow (Actual) -\$100,000 -\$16,251 \$27,918 \$23,472 Book Value \$66,670 \$22,220 \$7,410 PW(actual \$) -\$45,131

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4 \$50,000 \$25,001 \$7,410 \$17,589 \$2,638 \$14,951 \$14,951 \$7,410 \$30,000 -\$4,500 \$47,861 \$0
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## This note was uploaded on 08/30/2009 for the course ISE 460 taught by Professor Bottlik during the Fall '06 term at USC.

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FinalTemplate - Initial Working Capital Length of Project...

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