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FIN+4414+-+Depreciation%2C+NCF%2C+NOPAT%2C+OCF%2C+and+EVA

FIN+4414+-+Depreciation%2C+NCF%2C+NOPAT%2C+OCF%2C+and+EVA -...

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Depreciation Tax Shelters Sales $200.00 $200.00 Sales Cost of Goods Sold -$70.00 -$70.00 Cost of Goods Sold Depreciation -$30.00 $0.00 EBIT $100.00 $130.00 EBIT Interest -$50.00 -$50.00 Interest EBT $50.00 $80.00 EBT Taxes (40%) -$20.00 -$32.00 Taxes (40%) Net Income $30.00 $48.00 Net Income Plus: Depreciation $30.00 $12.00 Plus: Depreciation TS Net Cash Flow $60.00 $60.00 Net Cash Flow NCF = NI + D NI = (R - C - D - I)*(1-T) NCF = (R - C - D - I)*(1-T) + D NCF = (R - C - I)*(1-T) + TD
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Net Income Versus NOPAT EBIT $100.00 $100.00 EBIT Interest -$50.00 $0.00 EBT $50.00 $100.00 EBT Taxes (40%) -$20.00 -$40.00 Taxes (40%) Net Income $30.00 $60.00 NOPAT
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Unformatted text preview: $30.00 $60.00 NOPAT Assets $1,000.00 $1,000.00 Assets ROA 3.00% 6.00% ROA BEP 10.00% 10.00% BEP BEP*(1-T) 6.00% 6.00% BEP*(1-T) NOPAT = EBIT*(1-T) EBIT = (R - C - D) NOPAT = (R - C - D)*(1-T) NI = NOPAT - I + TI ⇒ $30 = $60 - $50 + $20 __________ OCF = NOPAT + D OCF = (R - C - D)*(1-T) + D OCF = (R - C)*(1-T) + TD EVA = (EBIT)*(1-T) - (WACC)*(Capital) EVA = NOPAT - (WACC)*(Capital) ROIC = EBIT*(1-T) / Capital EVA = (ROIC - WACC)*(Capital) __________ EVA = NI - (r S )*(Equity Capital) ROE = NI / (Equity Capital) EVA = (ROE - r S )*(Equity Capital)...
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