XYZ - XYZ Corporation Inflation = Capital Expenditures Revenues Expenses Depreciation Gross Profit Taxes Net Income Add back Depreciation Working

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Inflation = 7% 0 1 2 3 4 5 6 Capital Expenditures -14000 3000 Revenues 5000 5350 5724.50 6125.22 6125.22 6125.22 Expenses 2000 2140 2289.80 2450.09 2450.09 2450.09 Depreciation 2,200 3,520 2,090 1,210 1,210 660 Gross Profit 800 -310 1344.70 2465.13 2465.13 3015.13 Taxes 280 -108.5 470.65 862.80 862.80 1055.30 Net Income 520 -201.5 874.06 1602.33 1602.33 1959.83 Add back Depreciation 2720 3318.5 2964.06 2812.33 2812.33 2619.83 Working Capital -50 50.00 Net Cash Flows -14050 2720 3318.5 2964.06 2812.33 2812.33 5669.83 NPV $259.80 Market value = book value, so no tax implications of sale Depreciation % 1 0.2 $2,200.00 2 0.32 $3,520.00 3 0.19 $2,090.00 4 0.11 $1,210.00 5 0.11 $1,210.00 6 0.06 $660.00 8 9 Johnson Inc. 0 1 2 3 4 5 6 7 Land -400000 751815 796924 Capital Expenditures -2500000 375908 398462 Revenue 500000 530000 561800 595508 631238 669113 709260 100000 100000 Expense 250000 265000 280900 297754 315619 334556 354630 275908 298462 Depreciation 100000 100000 100000 100000 100000
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This note was uploaded on 03/02/2011 for the course BMGT 340 taught by Professor White during the Spring '08 term at Maryland.

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XYZ - XYZ Corporation Inflation = Capital Expenditures Revenues Expenses Depreciation Gross Profit Taxes Net Income Add back Depreciation Working

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