Quarter 5 - Capital Budgeting

# Quarter 5 - Capital Budgeting - Simple WACC Calculation...

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Simple WACC Calculation Explantion From Quarterly From Printout (For Debt Only) (Capital Component of Variables Printout and See** Below Rate(1-T) /Total Capital) Weight * A/T Cost Long Term Liabilities \$ Amount Rate (A/T Cost) Weight% Weighted cost * Intermediate Loans: 2 years \$0.00 3.11000% 2.48800% 0.00000% 0.00000000% * 3 years \$0.00 2.50000% 2.00000% 0.00000% 0.00000000% *Bonds \$12,592,500.00 3.21200% 2.56960% 31.09130% 0.79892214% Total Long Term Liabilities \$12,592,500.00 Owners' equity **Preferred Stock \$0.00 3.67000% 2.93600% 0.00000% 0.00000000% ***Common Stock \$20,912,158.00 5.21200% 4.16960% 51.63282% 2.15288196% ***Retained Earnings \$6,997,021.00 5.21200% 4.16960% 17.27588% 0.72033504% Total Equity \$27,909,179.00 Total 100.00000% Total Capital (Total Liabilities + Total Equity) \$40,501,679.00 WACC 3.67213914% Outstanding Debt Yields (historical) from Printout under Summary Data: 2-year loan 3-year loan Bonds 3.11000% 2.50000% 3.21200% Preferred Dividend Yield from the Summary Data 3.67000% ***For CS and RE an approx of the 5.21200% cost for equity is the bond rate + 2%

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Cost \$607,992.00 Labor Total Overhead Q Units Savings Labor Savings Savings Total Savings Dep per Yr Increase in TI Taxes 20% NI ATCF Q5 100000 0.75 \$75,000.00 \$15,189.00 \$90,189.00 \$75,999.00 \$14,190.00 \$2,838.00 \$11,352.00 \$87,351.00 Q6 100000 0.78 \$78,000.00 \$15,189.00 \$93,189.00 \$75,999.00 \$17,190.00 \$3,438.00 \$13,752.00 \$89,751.00 Q7 100000 0.81 \$81,000.00 \$15,189.00 \$96,189.00 \$75,999.00 \$20,190.00 \$4,038.00 \$16,152.00 \$92,151.00 Q8 100000 0.84 \$84,000.00 \$15,189.00 \$99,189.00 \$75,999.00 \$23,190.00 \$4,638.00 \$18,552.00 \$94,551.00 Q9 EST 100000 0.87 \$87,000.00 \$15,189.00 \$102,189.00 \$75,999.00 \$26,190.00 \$5,238.00 \$20,952.00 \$96,951.00 Q10 EST 100000 0.9 \$90,000.00 \$15,189.00 \$105,189.00 \$75,999.00 \$29,190.00 \$5,838.00 \$23,352.00 \$99,351.00 Q11 EST 100000 0.93 \$93,000.00 \$15,189.00 \$108,189.00 \$75,999.00 \$32,190.00 \$6,438.00 \$25,752.00 \$101,751.00 Q12 EST 100000 0.96 \$96,000.00 \$15,189.00 \$111,189.00 \$75,999.00 \$35,190.00 \$7,038.00 \$28,152.00 \$104,151.00 Cost -\$607,992.00 Savings q1 \$87,351.00 Savings q2 \$89,751.00 Savings q3 \$92,151.00 Savings q4 \$94,551.00 Savings q5 \$96,951.00 Savings q6 \$99,351.00 Savings q7 \$101,751.00 Savings q8
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