3232ex12-3 - 3232ex12-3 Machine cost Machine life (yrs)...

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3232ex12-3 Machine cost 125,000 Machine life (yrs) 5 Salvage 50,000 CCA 20% Annual Revenue 100,000 Annual Labor 20,000 Annual Mat'l 12,000 O/H 8,000 Marginal Tax Rate 40% Inflation free MARR 15% General inflation 5% Sales, salvage, and operating costs track inflation Find PE with and without inflation
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Without Inflation Year 0 1 2 3 4 5 Income Statement Revenue 100,000 100,000 100,000 100,000 100,000 Expense Labor 20,000 20,000 20,000 20,000 20,000 Mat'l 12,000 12,000 12,000 12,000 12,000 O/H 8,000 8,000 8,000 8,000 8,000 Interest 0 0 0 0 0 CCA 20% 12500 22500 18000 14400 11520 Taxable Income 47,500 37,500 42,000 45,600 48,480 Inc. Tx 40% 19000 15000 16800 18240 19392 Net Income 28,500 22,500 25,200 27,360 29,088 Cash Flow Statement Operating Activities Net Income 28,500 22,500 25,200 27,360 29,088 CCA 12500 22500 18000 14400 11520 Investment Activities Purchase -125,000 Salvage 50,000 Disp. Tx -1568 Finance Activities Principal Net Cash Flow -125000 41000 45000 43200 41760 89040 UCC 125,000 112,500 90,000 72,000 57,600 46,080 PE(15%) $41,228.37 IRR 26.74%
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With Inflation Year 0 1 2 3 4 5 Income Statement Revenue 5% 105,000.00 110,250.00 115,762.50 121,550.63 127,628.16 Expense Labor 5% 21,000.00 22,050.00
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This note was uploaded on 11/19/2010 for the course ME 3232 taught by Professor Lyon during the Fall '10 term at University of New Brunswick.

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3232ex12-3 - 3232ex12-3 Machine cost Machine life (yrs)...

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