Cash Flows-Grayson Products Sequel-Solutions

Cash Flows-Grayson Products Sequel-Solutions - $2,000,000...

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Information for Grayson Products Financial Information  $9,750,000  New Machine Price  $250,000  Shipping & Installation Straight Line Depreciation  $175,000  Initial NWC 1 20%  $2,000,000   $325  Unit Sales Price (Yr 1-4) 2 20%  $2,000,000   $245  Unit Sales Price (Yr 5) 3 20%  $2,000,000   $160  Variable Costs 4 20%  $2,000,000   $220,000  Fixed Costs 5 20%  $2,000,000  Capitalized Amt: $10,000,000 Total Depreciated:  $10,000,000  NWC: 10% Tax Rate 35% Cost of Capital 14% Operating Cash Flows 0 1 2 3 4 5 Units  75,000   125,000   145,000   85,000   65,000  Price  $325.00   $325.00   $325.00   $325.00   $245.00  Total Sales  $24,375,000.00   $40,625,000.00   $47,125,000.00   $27,625,000.00   $15,925,000.00  Variable Costs  $12,000,000   $20,000,000   $23,200,000   $13,600,000   $10,400,000  FC  $220,000   $220,000   $220,000   $220,000   $220,000  EBDIT  $12,155,000   $20,405,000   $23,705,000   $13,805,000   $5,305,000  Depreciation
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 EBIT $10,155,000 $18,405,000 $21,705,000 $11,805,000 $3,305,000 Taxes $3,554,250 $6,441,750 $7,596,750 $4,131,750 $1,156,750 NOPAT $6,600,750 $11,963,250 $14,108,250 $7,673,250 $2,148,250 Depreciation $2,000,000 $2,000,000 $2,000,000 $2,000,000 $2,000,000 Subtotal $8,600,750 $13,963,250 $16,108,250 $9,673,250 $4,148,250 Shipping & Installation ($250,000) Capital Expenditures ($9,750,000) Total NWC ($175,000) (2,437,500) (4,062,500) (4,712,500) (2,762,500) (1,592,500) NWC ∆ (2,262,500) (1,625,000) (650,000) 1,950,000 1,170,000 Return of NWC 1,592,500 OCF: $(10,175,000) $6,338,250 $12,338,250 $15,458,250 $11,623,250 $6,910,750 NPV $25,783,753.68 IRR 90%...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern