take home exam problem from finance fall 09

take home exam problem from finance fall 09 -...

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NAME : AMIN, NAIYA B. TAKE HOME EXAM, PROBLEM # 3 All amounts in this problems are in thousands ('000) New Business needs 5000 where t=0 1. ∆NOWC (Change in net operation working capital) increase in inventories 400 increase in accounts payable 150 250 ∆NOWC 2. intial investment outlay : New Business  -5000 ∆NOWC -250 -5250 Initial Investment Outlay 3. Depreciation Schedule: Depreciation Schedule 1 2 3 4 Rate 0.33 0.45 0.15 0.07 Basis 5000 5000 5000 5000 Depreciation (Rate*Basis) 1650 2250 750 350 Book Value 3350 1100 350 0 4. operating cash flows: year 1 2 3 4 Revenues 4000 4000 5000 5000 Cost (65.8%) 2632 2632 3290 3290 Depreciation 1650 2250 750 350 0.66 Operating Income (BT) -282 -882 960 1360 Taxes (40%) -112.8 -352.8 384 544 0.4 Operating Income (AT) -169.2 -529.2 576 816 Depreciation 1650 2250 750 350 Operating Cash Flows 1480.8 1720.8 1326 1166
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5. Terminal Value: ∆NOWC Recovery 250 Salvage Value 0 Book Value 0 taxes 0 250 Terminal Value
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This note was uploaded on 02/08/2011 for the course ACCT 3100 taught by Professor Yamoh during the Spring '11 term at Kean.

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take home exam problem from finance fall 09 -...

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