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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
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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
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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
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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
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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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