Ch 13 Project NPV - PROJECT NPV Basics(in thousands of $...

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Basics (in thousands of $) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Key Assumptions Unit Sales 5700 8174 11720 16807 24100 14058 8200 Inflation Rate 1.50% 1.83% 2.15% 2.48% 2.80% 2.80% 2.80% Real Cost of Capital 9.30% 9.52% 9.73% 9.95% 10.17% 10.38% 10.60% Tax Rate 42.00% 42.00% 42.00% 42.00% 42.00% 42.00% 42.00% Discounting Discount Rate = Cost of Capital 10.94% 11.52% 12.09% 12.67% 13.25% 13.47% 13.70% Cumulative Discount Factor 0.0% 10.94% 23.71% 38.68% 56.25% 76.95% 100.79% 128.30% Price or Cost / Unit Sales Revenue / Unit $15.30 $15.58 $15.91 $16.31 $16.76 $17.23 $17.72 Variable Cost / Unit $9.20 $9.37 $9.57 $9.81 $10.08 $10.36 $10.65 Cash Fixed Costs $7,940.00 $8,084.91 $8,258.73 $8,463.13 $8,700.10 $8,943.70 $9,194.13 Cash Flow Forecasts Sales Revenue $87,210.00 $127,337.48 $186,522.05 $274,083.97 $404,028.78 $242,272.33 $145,276.49 Variable Costs $52,440.00 $76,568.94 $112,157.05 $164,808.66 $242,945.41 $145,680.10 $87,355.80 Gross Margin $34,770.00 $50,768.54 $74,365.00 $109,275.31 $161,083.37 $96,592.24 $57,920.69 Cash Fixed Costs $7,940.00 $8,084.91 $8,258.73 $8,463.13 $8,700.10 $8,943.70 $9,194.13 Depreciation $4,557.14 $4,557.14 $4,557.14 $4,557.14 $4,557.14 $4,557.14 $4,557.14 Total Fixed Costs $12,497.14 $12,642.05 $12,815.87 $13,020.28 $13,257.24 $13,500.85 $13,751.27 Operating Profit $22,272.86 $38,126.49 $61,549.13 $96,255.03 $147,826.13 $83,091.39 $44,169.42 Taxes $9,354.60 $16,013.13 $25,850.63 $40,427.11 $62,086.97 $34,898.38 $18,551.16 Net Profit $12,918.26 $22,113.36 $35,698.49 $55,827.92 $85,739.15 $48,193.01 $25,618.26 Add Back Depreciation $4,557.14 $4,557.14 $4,557.14 $4,557.14 $4,557.14 $4,557.14 $4,557.14 Operating Cash Flow $17,475.40 $26,670.51 $40,255.64 $60,385.06 $90,296.30 $52,750.15 $30,175.41 Investment in Plant & Equip $(37,500.00) $(37,500.00) $(37,500.00) $(37,500.00) $(37,500.00) $(37,500.00) $(37,500.00) $5,600.00 Cash Flows $(37,500.00) $(20,024.60) $(10,829.49) $2,755.64 $22,885.06 $52,796.30 $15,250.15 $35,775.41 Present Value of Each Cash Flow $(37,500.00) $(18,050.02) $(8,753.61) $1,987.12 $14,646.72 $29,836.50 $7,594.89 $15,670.52 Net Present Value $5,432.12 P ROJECT NPV
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Sensitivity Analysis (in thousands of $) Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
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