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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