Copy of 482hw9 - keyassumptions unitsales inflationrate...

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2001 2002 year 1 year 2  key assumptions  unit sales 2000 inflation rate 2.00% real cost of capital 11.00% tax rate 35.00% discounting  discounting = cost of capital 13.22% cumulative discount factor 13.22% Price or cost/unit  sales revenue/ unit $9.70  Variable cost/unit $7.40  cash Fixed Costs $5,280  Cash flow Forecast sales revenue $19,400.00  variable costs  $14,800.00  Gross margins $4,600.00  Cash fixed costs $5,280  depreciation  1621 total fixed cost $6,901  operation Profit ($2,301.00) Taxes ($805.35) Net Profit  ($1,495.65) add back depeciation 1621 operating cash flow $125.35  ($11,350.00) cash flows ($11,350.00) $125.35  present value of each cash flow ($11,350.00) -11224.65 net present value $6,117.00 
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2003 2004 2005 2006 2007 year 3 year 4 year 5 year 6  year 7 4000 5600 6800 7400 3700 1,800 2.50% 3.00% 3.50% 4.00% 4.00% 4.00% 11.20% 11.40% 11.60% 11.80% 12.00% 12.20% 35.00%
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This note was uploaded on 09/10/2010 for the course IAH 001 taught by Professor Wang during the Spring '10 term at Michigan State University.

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Copy of 482hw9 - keyassumptions unitsales inflationrate...

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