Assignment 9 Luyao Wang

Assignment 9 Luyao - keyassumptions unit sales inflation rate real cost of capital tax rate 2001 year 0 2002 year 1 2000 2.00 11.00 35.00 2003 year

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2002 2003 2004 year 0 year 1 year 2 year 3 key assumptions  unit sales 2000 4000 5600 inflation rate 2.00% 2.50% 3.00% real cost of capital 11.00% 11.20% 11.40% tax rate 35.00% 35.00% 35.00% discounting  discounting = cost of capital 13.22% 13.98% 14.74% cumulative discount factor 13.22% 29.05% 48.07% Price or cost/unit  sales revenue/ unit $9.70 7.59 10.24 Variable cost/unit $7.40 7.59 7.81 cash Fixed Costs $5,280 5412 5412 Cash flow Forecast sales revenue $19,400.00 $30,340.00 $57,344.00 variable costs $14,800.00 $30,360.00 $43,736.00 Gross margins $4,600.00 ($20.00) $13,608.00 Cash fixed costs $5,280 $5,412 $5,412 depreciation 1621 1621 1621 total fixed cost $6,901 $7,033 $7,033 operation Profit ($2,301.00) ($7,053.00) $6,575.00 Taxes ($805.35) ($2,468.55) $2,301.25 Net Profit ($1,495.65) ($4,584.45) $4,273.75 add back depeciation 1621 1621 1621 operating cash flow $125.35 $3,179.00 $5,894.75 ($11,350.00) cash flows ($11,350.00) $125.35 $3,179.00
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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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Assignment 9 Luyao - keyassumptions unit sales inflation rate real cost of capital tax rate 2001 year 0 2002 year 1 2000 2.00 11.00 35.00 2003 year

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