3232ex12-4 - 11,450.00 9,895.00 13,944.50 17,480.95 Inc. Tx...

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3232ex12-4 Machine cost 30,000 Machine life (yrs) 4 Salvage 0 CCA 30% Annual Revenue 24,500 10,000 Working Cap 1,000 plus additional capital to cover inflation Marginal Tax Rate 40% Inflation free MARR 18% General inflation 10% 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 Income Statement Revenue 24,500 24,500 24,500 24,500 Expense 10,000 10,000 10,000 10,000 CCA 30% 4500 7650 5355 3748.5 Taxable Income 10,000 6,850 9,145 10,752 Inc. Tx 40% 4000 2740 3658 4300.6 Net Income 6,000 4,110 5,487 6,451 Cash Flow Statement Operating Activities Net Income 6,000 4,110 5,487 6,451 CCA 4500 7650 5355 3748.5 Investment Activities Purchase -30,000 Salvage 0 Disp. Tx 3498.6 Working Cap -1000 1000 Net Cash Flow -31000 10500 11760 10842 14698 UCC 30,000 25,500 17,850 12,495 8,747 PE(18%) $523.99 IRR 18.83%
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With Inflation Year 0 1 2 3 4 Income Statement Revenue 10% 26,950.00 29,645.00 32,609.50 35,870.45 Expense Labor 10% 11,000.00 12,100.00 13,310.00 14,641.00 CCA 30% 4,500.00 7,650.00 5,355.00 3,748.50 Taxable Income
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Unformatted text preview: 11,450.00 9,895.00 13,944.50 17,480.95 Inc. Tx 40% 4,580.00 3,958.00 5,577.80 6,992.38 Net Income 6,870.00 5,937.00 8,366.70 10,488.57 Cash Flow Statement Operating Activities Net Income 6,870.00 5,937.00 8,366.70 10,488.57 CCA 4,500.00 7,650.00 5,355.00 3,748.50 Investment Activities Purchase-30,000.00 Salvage 10% 0.00 Disp. Tx 3,498.60 Working Capit 10%-1,000.00-100.00-110.00-121.00 1,331.00 Net Cash Flow-31,000.00 11,270.00 13,477.00 13,600.70 19,066.67 ACTUAL DOLLARS Net Cash Flow (disc. 10%)-31,000.00 10,245.45 11,138.02 10,218.41 13,022.79 CONSTANT DOLLARS (YR 0) UCC 30,000.00 25,500.00 17,850.00 12,495.00 8,746.50 PE(18%)-1,382.01 (on discounted NCF) IRR 15.76% Market Rate 29.80% PE(29.80%)-1,382.01 (on actual NCF) PE(18%) 6,342.00 (on actual NCF) NOTE: DECEPTIVE AND ERRONEOUS ANSWERS!! IRR 27% (on actual NCF)...
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3232ex12-4 - 11,450.00 9,895.00 13,944.50 17,480.95 Inc. Tx...

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