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Copy of FCF 9th edition Chapter 10

Copy of FCF 9th edition Chapter 10 - Chapter 10 Problems...

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Chapter 10 Problems 1-36 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-In" be installed in Excel. To install these, click on the Office button then "Excel Options," "Add-Ins" and select "Go." Check "Analyis ToolPak" and "Solver Add-In," then click "OK."
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Chapter 10 Question 1 Input area: Purchase price $6,000,000 Appraised value $6,400,000 Cost to build $14,200,000 Grading costs $890,000 Output area: The acquisition cost is a sunk cost. The appraisal value is an opportunity cost and should be included. The cost to build and grading costs are investments in fixed assets and are included. Total initial cost $21,490,000
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Chapter 10 Question 2 Input area: Camper quantity 19,000 Camper price $13,000 Increased motor home quantity 4,500 Motor home price $53,000 Lost motor coach quantity 900 Motor coach price $91,000 Output area: Camper sales $247,000,000 Increased motor home sales 238,500,000 Lost motor coach sales (81,900,000) Total sales $403,600,000
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Chapter 10 Question 3 Input area: Projected sales $830,000 Variable cost (% of sales) 60% Fixed cost $181,000 Depreciation $77,000 Tax rate 35% Output area: Sales $830,000 Variable costs 498,000 Fixed costs 181,000 Depreciation 77,000 EBT $74,000 Taxes (35%) 25,900 Net Income $48,100
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Chapter 10 Question 4 Input area: Sales $824,500 Variable cost $538,900 Depreciation $126,500 Tax rate 34% Output area: Sales $824,500 Variable costs 538,900 Depreciation 126,500 EBT $159,100 Taxes (34%) 54,094 Net Income $105,006 OCF $231,506 Depreciation tax shield $43,010
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Chapter 10 Question 5 Input area: Projected sales $108,000 Costs $51,000 Depreciation $6,800 Tax rate 35% Output area: Sales $108,000 Variable costs 51,000 Depreciation 6,800 EBT $50,200 Taxes (35%) 17,570 Net Income $32,630 OCF $39,430 OCF $39,430 OCF $39,430 OCF $39,430
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Chapter 10 Question 6 Input area: Costs $1,080,000 *7-year property under MACRS Output area: Yr. Beginning Book Value MACRS Depreciation Ending Book value 1 $1,080,000.00 0.1429 $154,332.00 $925,668.00 2 925,668.00 0.2449 264,492.00 661,176.00 3 661,176.00 0.1749 188,892.00 472,284.00 4 472,284.00 0.1249 134,892.00 337,392.00 5 337,392.00 0.0893 96,444.00 240,948.00 6 240,948.00 0.0892 96,336.00 144,612.00 7 144,612.00 0.0893 96,444.00 48,168.00 8 48,168.00 0.0446 48,168.00 -
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Chapter 10 Question 7 Input area: Costs $548,000 Pretax salvage value $105,000 Tax rate 35% *Depreciation straight line 8 *Asset used in years 5 Output area: Annual depreciation $68,500 Accumulated depreciation $342,500 Book value $205,500 Aftertax cash flow $140,175
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Chapter 10 Question 8 Input area: Acquisition costs $7,900,000 Pretax salvage value $1,400,000 Tax rate 35% *MACRS class for taxes 0.2000 0.3200 0.1920 0.1152 Output area: Book Value $1,365,120 Aftertax cash flow $1,387,792
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Chapter 10 Question 9 Input area: Asset investment $3,900,000 Estimated annual sales $2,650,000 Costs $840,000 Tax rate 35% *Depreciation straight-line to zero over tax life 3 Output area: OCF $1,631,500
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Chapter 10 Question 10 Input area: Asset investment $3,900,000 Estimated annual sales $2,650,000 Costs $840,000 Tax rate 35% *Depreciation straight-line to zero over tax life 3 OCF $1,631,500 Required return 12% Output area: NPV $18,587.71
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Chapter 10 Question 11 Input area: Asset investment $3,900,000 Estimated annual sales $2,650,000 Costs $840,000 Tax rate 35% Required return 12% *Depreciation straight-line to zero over tax life 3 OCF $1,631,500 Initial investment in NWC $300,000 Fixed asset value at end $210,000 Output area: Year Cash flow 0 $(4,200,000) 1 $1,631,500 2 $1,631,500 3 $2,068,000 NPV $29,279.79
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Chapter 10 Question 12 Input area: Asset investment $3,900,000 Estimated annual sales $2,650,000 Costs $840,000 Tax rate 35% Required return 12% Initial investment in NWC $300,000 Fixed asset value at end $210,000 *3 yr MACRS 0.3333 0.4445 0.1481 Output area: Year Depreciation
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