18 1188 3397 4826 10800 3600 1680 9612 6997 6506

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Unformatted text preview: 18 $-11.88 $33.97 $48.26 $108.00 36.00 $16.80 $96.12 $69.97 $65.06 <----<----<----<----<----<----<----<----<----<----<----- 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 $82.08 $25.00 $10.00 $15.00 $20.00 $100.06 <----<----<----<----<----- Straight from the book Salvage value * Tax rate Difference Add back ∆NOWC Formula implementation <----<----<----<----- $96.12 Formula Formula Formula Formula $69.97 Tax rate WACC 40% 10% 0 Depr. Rate 1 2 33% 3 45% 4 15% 7% Adjusted WACC Year Cash flows WACC 13% 7% 13% 0 $-260.00 NPV $(2.226) $34.117 1 $82.08 2 $96.12 3 69.97 4 100.06 Allied's Lemon Juice Project (in Thousands) End of Year I. Investment Outlays Equipment cost Installation CAPEX Increase in inventory Increase in accounts payable ∆NOWC II. Project Operating Cash Flows Unit sales (thousands) Price/unit Total revenues Operating costs excluding depreciation Depreciation Total cost EBIT (or operating income) Taxes on operating income EBIT(1-T) = After-tax operating income...
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