KIN356CaseStudy - Griffin Warner KIN356 Case Study 1) Cash...

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Griffin Warner KIN356 Case Study 1) Cash Flow Table Revenue 2500000 3000000 3600000 4320000 4752000 5227200 Operations -1750000 -2100000 -2520000 -3024000 -3326400 -3659040 EBDT 750000 900000 1080000 1296000 1425600 1568160 Depreciation -560000 -896000 -537600 -322000 -322000 -162400 EBT 190000 4000 542400 974000 1,103,600 1405760 34% Tax -64600 -1360 -184416 -331160 -375,224 -477958.4 EAT 125400 2640 357984 642840 728,376 927801.6 add DEP 560000 896000 537600 322000 322,000 162400 Cash Flow 685400 898640 895584 964840 1,050,376 1090201.6 a. The expected value of the first year’s sales is $2,500,000.00 b. The growth rate in years 2-4 is 20% and years 5 & 6 is 10% so sales for the next 5 years would be: Revenue 2500000 3000000 3600000 4320000 4752000 5227200 c. Operating expenses are 70% of sales, so operating expenses in years 1-6 will be: Year One Year Two Year Three Year Four Year Five Year Six Revenue 2500000 3000000 3600000 4320000 4752000 5227200 Op. Expenses 1750000 2100000 2520000 3024000 3326400 3659040 EBDT 750000 900000 1080000 1296000 1425600 1568160 d. Depreciation from years 1-6: Depreciation 560000 896000 537600 322000 322000 162400 2) CV = standard deviation of first year sales/expected value CV = 1226000/2500000 = .4904 3) NPV = present value of cash flows – purchase price Cash Flow 685400 898640 895584 964840
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This note was uploaded on 06/15/2011 for the course KIN 356 taught by Professor Warner during the Fall '09 term at University of Texas at Austin.

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KIN356CaseStudy - Griffin Warner KIN356 Case Study 1) Cash...

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