1 pro forma income table statement statement sales

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Unformatted text preview: Income Table Statement Statement Sales (50,000 units at $4.00/unit) $200,000 Variable Costs ($2.50/unit) 125,000 Gross profit $ 75,000 Fixed costs 12,000 Depreciation ($90,000 / 3) 30,000 EBIT Taxes (34%) Net Income $ 33,000 11,220 $ 21,780 8 Table 10.2 Projected Capital Table Requirements Requirements Year 0 1 2 3 NWC $20,000 $20,000 $20,000 $20,000 NFA 90,000 90,000 60,000 60,000 30,000 30,000 0 Total $110,000 $80,000 $50,000 $20,000 9 Table 10.5 Projected Total Cash Table Flows Flows Year 0 OCF 1 $51,780 Change Change in NWC in -$110,00 3 $51,780 -$90,000 CFFA CFFA $51,780 -$20,000 NCS 2 20,000 $51,780 $51,780 $71,780 10 10 Making The Decision Now that we have the cash flows, we can apply Now the techniques that we learned in chapter 9 the Enter the cash flows into the calculator and Enter compute NPV and IRR compute CF0 = -110,000; C01 = 51,780; F01 = 2; C02 = 71,780 71,780 NPV; I = 20; CPT NPV = 10,648 CPT IRR = 25.8% Should we accept or reject the project? 11 11 More on NWC Why do...
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This document was uploaded on 03/01/2014 for the course FINANCE 250 at Indiana.

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