Exam II Review Problem

Exam II Review Problem - $500,000 $500,000 $500,000 Salvage...

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Dep Exp 1.8 per yr Year 0 1 2 3 Investment Cost -$10,000,000 Net Rev $4,000,000 $4,480,000 $5,017,600 Op Exp's -$2,000,000 -$2,060,000 -$2,121,800 Dep Exp -$1,800,000 -$1,800,000 -$1,800,000 Taxable Income $200,000 $620,000 $1,095,800 Tax Exp -$80,000 -$248,000 -$438,320 Net Income $120,000 $372,000 $657,480 Add back Dep Exp -$1,680,000 -$1,428,000 -$1,142,520 Working Capital -1500000 Addl After Tax Cash Flows
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Unformatted text preview: $500,000 $500,000 $500,000 Salvage Value Net Cash Flows-$11,500,000-$1,060,000 Capital Rate 0.15 NPV =-$12,421,739.13 4 5 $5,619,712 $6,294,077-$2,185,454-$2,251,018-$1,800,000-$1,800,000 $1,634,258 $2,243,060-$653,703-$897,224 $980,555 $1,345,836-$819,445-$454,164 $1,500,000 $500,000 $500,000 $1,000,000...
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Exam II Review Problem - $500,000 $500,000 $500,000 Salvage...

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