Ch09_Spreadsheets

Ch09_Spreadsheets -...

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Chapter 9 Example: Basic Operating Cash Flow Calcu Project Forecast Year: 0 1 2 3 4 Sales revenue 25,000 25,000 30,000 35,000 Operating expenses (16,250) (16,250) (19,500) (22,000) Depreciation (4,000) (4,000) (4,000) (4,000) Interest expense (900) (945) (992) (1,042) Income before tax 3,850 3,805 5,508 7,958 Tax (1,540) (1,522) (2,203) (3,183) Net income 2,310 2,283 3,305 4,775 Net working capital in place, on balance sheet 2,500 4,000 6,500 6,000 7,000 Equipment required for this project (40,000) Market value: Cash Flows from Assets: OCF Sales revenue 25,000 25,000 30,000 35,000 Operating expenses (16,250) (16,250) (19,500) (22,000) Depreciation (4,000) (4,000) (4,000) (4,000) EBIT 4,750 4,750 6,500 9,000 Tax on EBIT (1,900) (1,900) (2,600) (3,600) Depreciation 4,000 4,000 4,000 4,000 OCF 6,850 6,850 7,900 9,400 NWC NWC in place 2,500 4,000 6,500 6,000 7,000 Terminal value Change in NWC (2,500) (1,500) (2,500) 500 (1,000) Capital spending Purchase (40,000) Ending market value Ending book value Gain/Loss on book value Tax due or tax credit on gain/loss Ending cash flow Total capital spending (40,000)
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Cash Flow from Assets (42,500) 5,350 4,350 8,400 8,400 NPV @ 9% 1,384 IRR 9.9%
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ulation 5 35,000 (20,000) (4,000) (1,094) 9,906 (3,962) 5,944 8,750 16,000 35,000 (20,000) (4,000) 11,000 (4,400) 4,000 10,600 8,750 0 7,000 16,000 20,000 (4,000) 1,600 17,600 17,600
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35,200
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Chapter 10 Example:  Desmond Enterprises Desmond Enterprises is evaluating a three-year capital budgeting project. Machinery cost 21,000  Projected unit sales 10,000  Unit selling price Variable costs Fixed costs per year 5,000  Depreciation method Straight-line to zero over 3 years
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Ch09_Spreadsheets -...

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