3-1 - Year Increase in cash flows PVIF 1 1.00 0.89 0.89 2...

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

View Full Document Right Arrow Icon
A) Year  0 1 2 3 4 5 Initital investmen -800,000 EBITDA 200,000 210000 220500 231525 243101.25 Less: Tax  70,000 160,000 160,000 160,000 160,000 Add : Dep tax shield 56,000 56,000 56,000 56,000 56,000 Free cash flows 186,000 106,000 116,500 127,525 139,101 B) Cost of capital =  12% NPV = -$306,529.39 C)  When NPV = 0
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Year Increase in cash flows PVIF 1 1.00 0.89 0.89 2 1.05 0.80 0.84 3 1.10 0.71 0.78 4 1.16 0.64 0.74 5 1.22 0.57 0.69 Sum = 3.94 Free cash flow = 203043.06 Less: Dep tax shield 56000.00 Add: Tax 71065.07 EBITDA 218108.13...
View Full Document

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.

Ask a homework question - tutors are online