B-FNT1_Task2_Template_WORK from

B-FNT1_Task2_Template_WORK from - FNT1 Task 2...

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FNT1 Task 2 319.1.3-01-10, 2.1-04, 2.5-05 Capital Budgeting Template Richard K Net Cash Flow per Year Years 1-3 Years 4-6 Years 7-8 Expected annual sales of new product 3,200,000 3,600,000 3,800,000 Expected costs of new product Cash expenses 2,500,000 2,800,000 3,200,000 Depreciation expense 330,000 330,000 330,000 Income before taxes 370,000 470,000 270,000 Income tax at 30% marginal rate 111,000 141,000 81,000 Net income 259,000 329,000 189,000 Net cash flow 589,000 659,000 519,000 Net Present Value: 12% Present Cash Flows PV Factors Value Year 1 589,000 0.893 525,977 Year 2 589,000 0.797 469,433 Year 3 589,000 0.712 419,368 Year 4 659,000 0.636 419,124 Year 5 659,000 0.567 373,653 Year 6 659,000 0.507 334,113 Year 7 519,000 0.452 234,588 Year 8 519,000 0.404 209,676 Working Capital return 210,000 0.404 84,840 Salvage return 60,000 0.404 24,240 Remodeling cost (120,000) 0.404 -48,480 Total 3,046,532 Investment 2,910,000 Net Present Value 136,532 GRADERS: To provide for factor rounding, please allow plus or minus $5000 on this net present value solution.
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B-FNT1_Task2_Template_WORK from - FNT1 Task 2...

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