test 2 prep problem day

test 2 prep problem day - 307,880 Required rate of return...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Year 0 Year 1 Year 2 Year 3 Sales 420,000 420,000 420,000 Operatine xpe (130,000) (130,000) (130,000) EBITDA 290,000 290,000 290,000 Depreciation 51,000 102,000 102,000 EBI 239,000 188,000 188,000 Taxes 34% 81,260 63,920 63,920 PAT 157,740 124,080 124,080 Add depreciation 51,000 102,000 102,000 Operating cash flow 208,740 226,080 226,080 MACRS deprectiation 17% 34% 34% 51,000 102,000 102,000 NWC (50,000) 50,000 Machine 290,000 Install 10,000 Total cost 300,000 Sale machine in last year proceeds 25,000 Book value 45,000 loss on sale (20,000) Tax shield 34% (6,800) Cash gained on sale 31,800 Free cash flow (350,000) 208,740 226,080
Background image of page 2
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 307,880 Required rate of return 15%-350000 208740 226080 307880 NPV 204,898.10 IRR 46% Profitability Index 1.59 pv-774.31 n 40 fv 1000 coupont 45 rate 6.00% 12% required return 12% 1st year growth 10.0% 2nd stg 5.0% recent dividend 3 1 2 3 4 5 6 Dividend 3.30 3.63 3.99 4.19 4.40 4.62 59.90 CF 3.30 3.63 63.89 NPV $51.31 required return 15% 1st year growth 20.0% 2nd stg 8.0% recent dividend 2 1 2 3 4 5 6 Dividend 2.40 2.88 3.46 3.73 4.03 4.35 53.32 CF 2.40 2.88 56.78 NPV $41.60 pv of each $2.09 $2.18 $2.27 $6.54 $35.06 sum of pv's 41.60 2.09 2.18 37.33...
View Full Document

Page1 / 4

test 2 prep problem day - 307,880 Required rate of return...

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