Case study - Summarizing the Relevant CashFlows PressA InitialInvestment Cost Installationcost SaleofOldPress total investment Information needed

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Summarizing the Relevant Cash Flows Press A Initial Investment  Cost $830,000.00 Installation cost $40,000.00 Sale of Old Press $420,000.00 total investment $450,000.00 Information needed to solve problem year 0 Revenue (EBIT) (Table 1 on PG. 544) Depriciation (5-year recovery period/Based from PG 152,) Tax @ 40% ( info on PG. 543) NOPAT (Formula on PG 157) OCF (Formula on PG 158) Total Operating cash inflows. year 0 Revenue (EBIT) (Table 1 on PG. 544) Depreciation Earnings before interest and taxes Taxes (40%) Net operating profit after taxes Depreciation Operating cash inflows (OFC) Total Terminal Cash Flow After-tax proceeds from sale of proposed machine (PG 445) Proceeds from sale of new asset=  $400,000.00  (-) Tax on sale of new asset $160,000.00 Total after-tax proceeds—proposed (-) After-tax proceeds from sale of old asset= Proceeds from sale of present machine  $420,000.00  (-) Tax on sale of present machine $168,000.00 Total after-tax proceeds—present (+)Change in net working capital ( PG 437) Terminal cash flow Earnings before interest and taxes (EBIT)
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
(info on PG. 446) 1 2 3 4 5  $250,000.00   $270,000.00   $300,000.00   $330,000.00   $370,000.00   $50,000.00   $86,400.00   $57,000.00   $39,600.00   $44,400.00   $200,000.00   $183,600.00   $243,000.00   $290,400.00   $325,600.00   $80,000.00   $73,440.00   $97,200.00   $116,160.00   $130,240.00   $150,000.00   $162,000.00   $180,000.00   $198,000.00   $222,000.00 
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/22/2011 for the course FIN & ACC 504 & 502 taught by Professor Harper&tai during the Spring '11 term at Grand Canyon.

Page1 / 7

Case study - Summarizing the Relevant CashFlows PressA InitialInvestment Cost Installationcost SaleofOldPress total investment Information needed

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online