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FIN540 Calculations

# FIN540 Calculations - Year Intial Investment Revenues...

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Year 0 1 2 3 4 Intial Investment -1,700,000 Revenues 13,475,000 13,475,000 13,475,000 13,475,000 Variable Costs 12,100,000 12,100,000 12,100,000 12,100,000 Fixed Costs 520,000 520,000 520,000 520,000 Intial Working Capital -600,000 Depreciation 340,000 340,000 340,000 340,000 Pre Tax Profit 1,195,000 1,195,000 1,195,000 1,195,000 Taxes 38% 454,100 454,100 454,100 454,100 Net Profit 740,900 740,900 740,900 740,900 Salvage Value Operating Cash Flows 400,900 400,900 400,900 400,900 Intial Investment Cost -2,300,000 Discount Rate 13% NPV = -727,114.01 Notes: Variable costs are \$220 per ton, plan is to produce 55,000 tons of machine screws, 220 x 55,00 per year in variable costs Revenues are based off marketing psoject that each ton will be sold for \$245. Company is porje 55,000 tons of product. Times 55,000 x \$245 this equals \$13,475,000 Worst Case Year 0 1 2 3 4 Intial Investment -1,955,000 Revenues 12,127,500 12,127,500 12,127,500 12,127,500 Variable Costs 12,100,000 12,100,000 12,100,000 12,100,000 Fixed Costs 520,000 520,000 520,000 520,000 Intial Working Capital -630,000 Depreciation 340,000 340,000 340,000 340,000 Pre Tax Profit -152,500 -152,500 -152,500 -152,500 Taxes 38% -57,950 -57,950 -57,950

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• Spring '11
• ProfSmith
• Generally Accepted Accounting Principles, Pre tax profit, Intial Working Capital, Intial Investment, \$13,475,000

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FIN540 Calculations - Year Intial Investment Revenues...

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