Excel Solutions - Chapter 10

Fundamentals of Corporate Finance Standard Edition

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Chapter 10 Problems 1-27 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green
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Chapter 10 Question 1 Input area: Purchase price $5,000,000 Appraised value 5,400,000 Cost to build 10,400,000 Grading costs 650,000 Output area: The acquisition cost is a sunk cost. The appraisal value is an opportunity cost and should be included. The cost to build and grading costs are investments in fixed assets and are included. Total initial cost $16,450,000
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Chapter 10 Question 2 Input area: Camper quantity 21,000 Camper price $12,000 Increased motor home quantity 5,000 Motor home price $45,000 Lost motor coach quantity 1,300 Motor coach price $85,000 Output area: Camper sales $252,000,000 Increased motor home sales 225,000,000 Lost motor coach sales (110,500,000) Total sales $366,500,000
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Chapter 10 Question 3 Input area: Projected sales $650,000 Variable cost (% of sales) 60% Fixed cost $158,000 Depreciation $75,000 Tax rate 35% Output area: Sales $650,000 Variable costs 390,000 Fixed costs 158,000 Depreciation 75,000 EBT $27,000 Taxes 9,450 Net Income $17,550
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Chapter 10 Question 4 Input area: Sales $912,400 Variable cost $593,600 Depreciation $135,000 Tax rate 34% Output area: Sales $912,400 Variable costs 593,600 Depreciation 135,000 EBT $183,800 Taxes 62,492 Net Income $121,308 OCF $256,308 Depreciation tax shield $45,900
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Chapter 10 Question 5 Input area: Projected sales $85,000 Costs $43,000 Depreciation $3,000 Tax rate 35% Output area: Sales $85,000 Variable costs 43,000 Depreciation 3,000 EBT $39,000 Taxes 13,650 Net Income $25,350 OCF $28,350 OCF $28,350 OCF $28,350 OCF $28,350
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Chapter 10 Question 6 Input area: Costs $847,000 *7-year property under MACRS Output area: Yr. Beginning Book Value MACRS Depreciation 1 $847,000.00 0.1429 $121,036.30 2 725,963.70 0.2449 207,430.30 3 518,533.40 0.1749 148,140.30 4 370,393.10 0.1249 105,790.30 5 264,602.80 0.0893 75,637.10 6 188,965.70 0.0893 75,637.10 7 113,328.60 0.0893 75,637.10 8 37,691.50 0.0445 37,691.50
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Ending Book value $725,963.70 518,533.40 370,393.10 264,602.80 188,965.70 113,328.60 37,691.50 -
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Chapter 10 Question 7 Input area: Costs $440,000 Pretax salvage value $55,000 Tax rate 35% *Depreciation straight line 8 *Asset used in years 5 Output area: Book Value $165,000 Aftertax cash flow $93,500
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Chapter 10 Question 8 Input area: Acquisition costs $9,300,000 Pretax salvage value $2,100,000 Tax rate 35% *MACRS class for taxes 0.2000 0.3200 0.1920 0.1152 Output area: Book Value $1,607,040 Aftertax cash flow $1,927,464
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Chapter 10 Question 9 Input area: Asset investment $2,700,000 Estimated annual sales $2,400,000 Costs $960,000 Tax rate 35% *Depreciation straight-line to zero over tax life 3 Output area: OCF $1,251,000
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Chapter 10 Question 10 Input area: Asset investment $2,700,000 Estimated annual sales $2,400,000 Costs $960,000 Tax rate 35% *Depreciation straight-line to zero over tax life 3 OCF $1,251,000 Required return 15% Output area: NPV $156,314.62
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Excel Solutions - Chapter 10 - Chapter 10 Problems 1-27...

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