# 00 20000 12000 10800 22800 2800 1120 1680 10800 9120

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Unformatted text preview: ght from book ∆CA - ∆CL 100 \$2.00 \$200.00 \$120.00 \$108.00 \$228.00 \$-28.00 \$-11.20 \$-16.80 \$108.00 \$91.20 100 100 \$2.00 \$2.00 \$200.00 \$200.00 \$120.00 \$120.00 \$36.00 \$16.80 \$156.00 \$136.80 \$44.00 \$63.20 \$17.60 \$25.28 \$26.40 \$37.92 \$36.00 \$16.80 \$62.40 \$54.72 <----<----<----<----<----<----<----<----<----<----<----- Equal number of sales Equal price Product 60% of TR Respective depr. Rate * \$240 (CAPEX) SUM TR - TC EBIT*Tax rate EBIT - T Depreciation SUM \$91.20 \$-89.12 - \$25.00 \$10.00 \$15.00 \$20.00 \$89.72 \$63.00 3.30 <----<----<----<----<----- Straight from the book Salvage value * Tax rate Difference Add back ∆NOWC Formula implementation Formula Formula Formula Formula \$62.40 \$-26.72 - Negative NPV so reject the project Tax rate WACC 40% 10% 0 Depr. Rate 1 2 33% a 5. If the machine was sold for less than its book value, then the tax effect would be positive 3 45% 4 15% 7% Scenario Summary Current Values: Sales -30% Sales -20% Sales -10% Sales Base Sales +10% Sales +20% Sales +30% Salvage -30% Salvage -20% Salvage -10% Salvage Base Salvage +10% Salvage +20% Salvage +30% WACC -30% WACC -20% WACC -10% WAC...
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## This homework help was uploaded on 02/16/2014 for the course BUS 330 taught by Professor Ned during the Winter '13 term at American University in Bulgaria.

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