BUSI 408 - In-Class CF Solutions

BUSI 408 - In-Class CF Solutions - NWC (end) Chg in NWC NWC...

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- 1 2 3 4 NWC (end) 5,000 5,500 6,050 6,655 Chg in NWC 5,000 500 550 605 (6,655) - 1 2 3 4 NWC (continuing) 5,000 5,500 6,050 6,655 7,321 Chg in NWC 5,000 500 550 605 666 0 1 2 3 4 a. Inflation rate per year 3% Equipment (50,000) Development Expense (50,000) Unit sales 10,000 20,000 25,000 30,000 Price/unit 5.50 6.00 6.50 7.00 Variable Cost / Unit $2.50 $2.75 $3.00 $3.25 Revenues 55,000 120,000 162,500 210,000 Total Variable Cost (25,000) (55,000) (75,000) (97,500) Lease costs (48,000) (48,000) (48,000) (48,000) Depreciation expense (12,500) (12,500) (12,500) (12,500) Marketing expenses (5,000) (5,150) (5,305) (5,464) inflation Operating expenses (8,000) (8,240) (8,487) (8,742) inflation Development Expense (50,000) Net Operating Profit (EBIT) (50,000) (43,500) (8,890) 13,208 37,795 Taxes @ 40% 20,000 17,400 3,556 (5,283) (15,118) NOPAT (30,000) (26,100) (5,334) 7,925 22,677 Add back depreciation 12,500 12,500 12,500 12,500 Change in NWC (5,000) (500) (550) (605) 6,655 Capital Expenditures
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This note was uploaded on 02/27/2012 for the course BUSI 407 taught by Professor Bowen during the Spring '11 term at UNC.

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