Copy of Xl0000000 - 21/p.234 IO rev exp depr EBT tax EAT...

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21/p.234 0 1 2 3 4 IO (45,000) rev 40,000 30,000 20,000 10,000 exp (16,000) (12,000) (8,000) (4,000) depr (11,250) (11,250) (11,250) (11,250) EBT 12,750 6,750 750 (5,250) tax (5,100) (2,700) (300) 2,100 EAT 7,650 4,050 450 (3,150) oper CF (add depr) 18,900 15,300 11,700 8,100 WC requirement (8,000) (6,000) (4,000) (2,000) 0 WC cash flows (8,000) 2,000 2,000 2,000 2,000 salvage 0 NCF (53,000) 20,900 17,300 13,700 10,100 NPV (12%) (4,377.71) IRR 8% 23/p.234 0 1 2 3 4 5 6 7 8 Q&D sys. IO (10.00) oper cost (1.00) (1.00) (1.00) (1.00) (1.00) depr (2.00) (2.00) (2.00) (2.00) (2.00) effect on tax payable (3.00) (3.00) (3.00) (3.00) (3.00) tax savings (1.05) (1.05) (1.05) (1.05) (1.05) IO (10.00) oper cost (1.00) (1.00) (1.00) (1.00) (1.00) tax savings 1.05 1.05 1.05 1.05 1.05 salvage 0.00 NCF (10.00) 0.05 0.05 0.05 0.05 0.05 NPV (12%) (10.00) AE (2.77) DIR sys IO (12.00) oper cost (1.00) (1.00) (1.00) (1.00) (1.00) (1.00) (1.00) (1.00) depr (1.50) (1.50) (1.50) (1.50) (1.50) (1.50) (1.50) (1.50) effect on tax payable (2.50) (2.50) (2.50) (2.50) (2.50) (2.50) (2.50) (2.50) tax savings (0.63) (0.63) (0.63) (0.63) (0.63) (0.63) (0.63) (0.63) IO (12.00) oper cost (1.00) (1.00) (1.00) (1.00) (1.00) (1.00) (1.00) (1.00) tax savings 0.63 0.63 0.63 0.63 0.63 0.63 0.63 0.63 salvage 0.00 NPV (12.00) AE (2.42)
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Exercise 3 0 1 2 3 4 5 1. Initial investment Oven (5,000) Freezer (7,000) Smoke/burlar alarm (2,000) Utensils (10,000) 2. Operation Pizza unit 700 700 700 700 700 Revenue _ pizza 100,800 100,800 100,800 100,800 100,800 12x700 x 12months Softdrink unit 350 350 350 350 350 revenue _ softdrink 6,300 6,300 6,300 6,300 6,300 1.5x350 x 12 months Total revenue 107,100 107,100 107,100 107,100 107,100 Lease (opprt.cost) (9,600) (9,600) (9,600) (9,600) (9,600) Ingredients (25,200) (25,200) (25,200) (25,200) (25,200) 3x700 x 12 months ads (6,000) (6,000) 500 x 12 months electricity (9,600) (9,600) (9,600) (9,600) (9,600) 12 months wages (36,000) (36,000) (36,000) (36,000) (36,000) 12 months car expenses (3,000) (3,000) (3,000) (3,000) (3,000) Depr. - oven (1,000) (1,000) (1,000) (1,000) (1,000) Depr. - freezer
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