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Case studies - Aneal Tenjarla Lucas Jeter Brittany...

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1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Sales 13,280 16,800 19,760 21,356 23,028 COGS 10,824 12,869 14,919 16,317 17,973 Depreciation 1,060 1,110 1,160 1,210 1,270 1,439 1,589 1,789 2,089 2,689 CAPX 600 600 600 600 600 600 600 600 600 600 Change in NWC (204) 316 266 144 150 162 175 189 204 220 (1-Tax rate) 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52 EBIT 1,396 2,821 3,681 3,829 3,785 3,785 3,785 3,785 3,785 3,785 EBIT * (1-T) 726 1467 1914 1991 1968 1968 1968 1968 1968 1968 FCF 1,390 1,661 2,208 2,457 2,488 2,645 2,782 2,968 3,253 3,837 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 Sales 13,280 16,800 19,760 21,356 23,028 23,028 23,028 23,028 23,028 23,028 COGS 9,233 10,918 12,636 13,798 15,205 15,205 15,205 15,205 15,205 15,205 Depreciation 1,060 1,110 1,160 1,210 1,270 1,804 1,954 2,154 2,454 3,054 CAPX 600 600 600 600 600 600 600 600 600 600 Change in NWC (204) 316 266 144 150 162 175 189 204 220 (1-Tax rate) 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52 0.52 EBIT 2,987 4,772 5,964 6,348 6,553 6,019 5,869 5,669 5,369 4,769 EBIT * (1-T) 1553 2482 3101 3301 3408 3130 3052 2948 2792 2480 FCF 2,217 2,676 3,395 3,767 3,928 4,172 4,231 4,313 4,442 4,714 Aneal Tenjarla Lucas Jeter Brittany Jefferson Nick Rayo Assignment 3: The Dixon Corporation: The Collinsville Plant 1. Without the laminate, the incremental cash flows of the project are expected to total $13.8 million. We used a discount rate of 11.25% which is consistent with the cost of the bonds issued to finance the project. *See Exhibit 1 for depreciation schedule 2. With the laminate, the project becomes significantly more profitable.
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