Finance assignment1 (Autosaved)

Finance assignment1 (Autosaved) - 10500 10500 10500 After...

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Year 0 1 2 3 4 5 Capital Investment -100000 0 0 0 0 0 Working Capital -8000 0 0 0 0 0 Change in Working Capital -8000 1600 1600 1600 1600 1600 CF from Working Capital -8000 1600 1600 1600 1600 1600 Revenue 45000 45000 45000 45000 45000 Expenses 15000 15000 15000 15000 15000 Depriciation 18000 18000 18000 18000 18000 Pretax profits 12000 12000 12000 12000 12000 Tax 4200 4200 4200 4200 4200 After Tax Profit 7800 7800 7800 7800 7800 CF from Operations 25800 25800 25800 25800 25800 Cash Flow Cash Flow from Capital Investment -100000 0 0 0 0 0 CF from Working Capital -8000 1600 1600 1600 1600 1600 CF from Operations 0 25800 25800 25800 25800 25800 Total -108000 27400 27400 27400 27400 27400 PV @ 11% -108000 $24,684.68 22238.45 20034.64 18049.23 16260.57 Net Present Value PV of Total Cashflows + PV of Salvage Net Present Value -797.91 NPV is negative, therefore Elliot Inc. Corporation should reject the Project.
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Year 0 1 2 3 4 5 Capital Investment -100000 0 0 0 0 0 Working Capital -8000 0 0 0 0 0 Change in Working Capital -8000 1600 1600 1600 1600 1600 CF from Working Capital -8000 1600 1600 1600 1600 1600 Revenue 45000 45000 45000 45000 45000 Expenses 15000 15000 15000 15000 15000 Depriciation 0 0 0 0 0 Pretax profits 30000 30000 30000 30000 30000 Tax 10500 10500
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Unformatted text preview: 10500 10500 10500 After Tax Profit 19500 19500 19500 19500 19500 CF from Operations 19500 19500 19500 19500 19500 Cash Flow Cash Flow from Capital Invest-100000 CF from Working Capital-8000 1600 1600 1600 1600 1600 CF from Operations 19500 19500 19500 19500 19500 Total-108000 21100 21100 21100 21100 21100 PV @ 11%-108000 $19,009.01 $17,125.23 $15,428.14 $13,899.22 $12,521.82-30016.57 Net Present Value PV(Total Cash flows excluding CCA Tax Shield) + PV(CCA Tax Shield) + PV of Salvage = PV of CCA Tax Shield (((100000*0.2*0.35)/(0.11+0.2)) *((1 +(0.5*0.11))/1.11))-(((10000*0.2*0.35/(0.11+0.2)) * (1/(1.11^5)))) = PV of Salvage 5934.51 Net Present Value -3960.33 Due to a negative NPV, Elliot Inc. Should reject the project. PV (Total CF excluding CCA Tax Shield ] ) 1 ( 1 ][ [ ] 1 5 . 1 ][ [ t c c r d r SdT r r d r CdT + +-+ + + 20121.73...
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This note was uploaded on 01/26/2010 for the course ADMS 3530 taught by Professor Unknown during the Spring '09 term at York University.

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Finance assignment1 (Autosaved) - 10500 10500 10500 After...

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