prob sol 3-4 - PROBLEM 3-4: TitMar Motor Company Given...

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Given Solution Legend Assumptions and Predictions Estimates = Value given in problem Price per unit $4,895 = Formula/Calculation/Analysis required Market share (%) 15.00% = Qualitative analysis or Short answer required Market size (Year 1) $200,000 = Goal Seek or Solver cell Growth rate in market size beginning in Year 2 5.00% = Crystal Ball Input Unit variable cost $4,250 = Crystal Ball Output Fixed cost $9,000,000 Tax rate 50.00% Cost of capital 18.00% Investment in NWC 5.00% $7,000,000 Depreciation (5 year life w/no salvage) $1,400,000 Solution Year 0 1 2 3 4 5 Investment $(7,000,000) Revenue 146,850,000 154,192,500 161,902,125 169,997,231 178,497,093 Variable Cost (127,500,000) (133,875,000) (140,568,750) (147,597,188) (154,977,047) Fixed cost (9,000,000) (9,000,000) (9,000,000) (9,000,000) (9,000,000) Depreciation (1,400,000) (1,400,000) (1,400,000) (1,400,000) (1,400,000) EBT(Net Operating Income) $8,950,000 $9,917,500 $10,933,375 $12,000,044
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This note was uploaded on 03/12/2012 for the course FINANCE 630 taught by Professor Smith during the Spring '12 term at University of Maryland Baltimore.

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