Capital Budgeting Exercises

Capital Budgeting Exercises - Capital Budgeting Assignment...

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

View Full Document Right Arrow Icon

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

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Capital Budgeting Assignment Question 1 Option 1 - Nuclear Power Year 2007 2008 2009 2010 2011 2012 Purchase of land $4,595,000.00 Construction costs $164,899,000.00 Investment in working capital $5,655,600.00 Electricity Sales Revenue $96,529,000.00 Labour Costs $6,751,000.00 Uranium Costs $21,850,000.00 Overhead Costs $2,640,000.00 Depreciation $16,489,900.00 Taxable Income $0.00 $0.00 $0.00 $0.00 $48,798,100.00 Tax Payable $0.00 $0.00 $0.00 $0.00 $14,639,430.00 Working capital requirement $5,655,600.00 $5,655,600.00 $5,655,600.00 $5,655,600.00 $9,652,900.00 $9,990,751.50 Additions to working capital $0.00 $0.00 $0.00-$3,997,300.00-$337,851.50 Recovery of working capital Revenue from the sale of land Tax on sale of land Free Cash Flows-$175,149,600.00 $0.00 $0.00 $0.00-$3,997,300.00 $50,310,718.50 Cost of Capital 11.50% NPV $22,385,904.60 IRR 13.03% Option 2 - Natural Gas Power Year 2007 2008 2009 2010 2011 2012 Purchase of land $8,250,000.00 Construction costs $63,466,000.00 Investment in working capital $3,245,000.00 Electricity Sales Revenue $34,618,000.00 $35,829,630.00 $37,083,667.05 Labour Costs $3,477,000.00 $3,598,695.00 $3,724,649.33 Natural Gas Costs $16,785,000.00 $16,449,300.00 $16,120,314.00 Overhead Costs $1,320,000.00 $1,366,200.00 $1,414,017.00 Depreciation $6,346,600.00 $6,346,600.00 $6,346,600.00 Taxable Income $0.00 $0.00 $6,689,400.00 $8,068,835.00 $9,478,086.73 Tax Payable $0.00 $0.00 $2,006,820.00 $2,420,650.50 $2,843,426.02 Working capital requirement $3,245,000.00 $3,245,000.00 $4,154,160.00 $4,299,555.60 $4,450,040.05 $4,605,791.45 Additions to working capital $0.00-$909,160.00-$145,395.60-$145,395....
View Full Document

Page1 / 6

Capital Budgeting Exercises - Capital Budgeting Assignment...

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