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Quarter 9 - Capital Budgeting

Quarter 9 - 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 \$10,802,500.00 3.21200% 2.56960% 25.34753% 0.65133008% Total Long Term Liabilities \$10,802,500.00 Owners' equity **Preferred Stock \$0.00 5.11000% 4.08800% 0.00000% 0.00000000% ***Common Stock \$20,912,158.00 5.21200% 4.16960% 49.06934% 2.04599507% ***Retained Earnings \$10,902,910.00 5.21200% 4.16960% 25.58314% 1.06671440% Total Equity \$31,815,068.00 Total 100.00000% Total Capital (Total Liabilities + Total Equity) \$42,617,568.00 WACC 3.76403955% 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 5.11000% ***For CS and RE an approx of the 5.21200% cost for equity is the bond rate + 2%

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Cost \$453,312.00 Labor Total Overhead Q Units Savings Labor Savings Savings Total Savings Dep per Yr Increase in TI Taxes 20% NI ATCF Q9 100000 \$0.56 \$56,000.00 \$13,078.00 \$69,078.00 \$56,664.00 \$12,414.00 \$2,482.80 \$9,931.20 \$66,595.20 Q10 100000 \$0.57 \$57,000.00 \$13,078.00 \$70,078.00 \$56,664.00 \$13,414.00 \$2,682.80 \$10,731.20 \$67,395.20 Q11 100000 \$0.58 \$58,000.00 \$13,078.00 \$71,078.00 \$56,664.00 \$14,414.00 \$2,882.80 \$11,531.20 \$68,195.20 Q12 100000 \$0.59 \$59,000.00 \$13,078.00 \$72,078.00 \$56,664.00 \$15,414.00 \$3,082.80 \$12,331.20 \$68,995.20 Q13 EST 100000 \$0.60 \$60,000.00 \$13,078.00 \$73,078.00 \$56,664.00 \$16,414.00 \$3,282.80 \$13,131.20 \$69,795.20 Q14 EST 100000 \$0.61 \$61,000.00 \$13,078.00 \$74,078.00 \$56,664.00 \$17,414.00 \$3,482.80 \$13,931.20 \$70,595.20 Q15 EST 100000 \$0.62 \$62,000.00 \$13,078.00 \$75,078.00 \$56,664.00 \$18,414.00 \$3,682.80 \$14,731.20 \$71,395.20 Q16 EST 100000 \$0.63 \$63,000.00 \$13,078.00 \$76,078.00 \$56,664.00 \$19,414.00 \$3,882.80 \$15,531.20 \$72,195.20 Cost -\$453,312.00 Savings q1 \$66,595.20 Savings q2 \$67,395.20 Savings q3 \$68,195.20 Savings q4 \$68,995.20 Savings q5 \$69,795.20 Savings q6 \$70,595.20 Savings q7 \$71,395.20 Savings q8 \$72,195.20
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