Example Questions

Example Questions - Part 1: Initial Outlay : What is the...

Info iconThis preview shows pages 1–4. 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

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: Part 1: Initial Outlay : What is the cash flow at time 0? (Purchase Price of the Asset) + (Shipping and Installation costs) (Depreciable Asset) + (Investment in Working Capital) + After-Tax Proceeds from Sale of Old Asset Net Initial Outlay Part 1: Initial Outlay : What is the cash flow at time 0? (220,000) + (Shipping and Installation costs) (Depreciable Asset) + (Investment in Working Capital) + After-Tax Proceeds from Sale of Old Asset Net Initial Outlay Part 1: Initial Outlay : What is the cash flow at time 0? (220,000) + (10,000) (Depreciable Asset) + (Investment in Working Capital) + After-Tax Proceeds from Sale of Old Asset Net Initial Outlay Part 1: Initial Outlay : What is the cash flow at time 0? (220,000) + (10,000) (230,000) + (Investment in Working Capital) + After-Tax Proceeds from Sale of Old Asset Net Initial Outlay Part 1: Initial Outlay : What is the cash flow at time 0? (220,000) + (10,000) (230,000) + (10,000) + After-Tax Proceeds from Sale of Old Asset Net Initial Outlay Part 1: Initial Outlay : What is the cash flow at time 0? (220,000) + (10,000) (230,000) + (10,000) + 0 Net Initial Outlay Part 1: Initial Outlay : What is the cash flow at time 0? (220,000) + (10,000) (230,000) + (10,000) + 0 ($240,000) Part 2: Annual Cash Flows: What incremental cash flows occur over the life of the project? Incremental Revenue- Incremental Costs- Depreciation on project Incremental Earnings before Taxes (EBT)- Tax on Incremental EBT Incremental Earnings after Taxes (or NI) + Depreciation Reversal Annual Cash Flow Incremental Revenue- Incremental Costs- Depreciation on project Incremental Earnings before Taxes (EBT)...
View Full Document

This note was uploaded on 11/21/2011 for the course BUS M 301 taught by Professor Jimbrau during the Summer '11 term at BYU.

Page1 / 9

Example Questions - Part 1: Initial Outlay : What is the...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online