Inputs and Key Results for Each Scenario Dollars in Thousands Base Worst Best

Inputs and key results for each scenario dollars in

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Inputs and Key Results for Each Scenario (Dollars in Thousands) Base Worst Best Scenarios: Scenario Name Base Worst Best Probability of Scenario 50% 25% 25% Intermediate Calculations 0 1 2 3 4 Intermediate Calculations 0 1 2 3 4 Intermediate Calculations 0 1 2 3 4 Inputs: Unit sales 10,000 11,500 13,225 15,209 Unit sales 8,500 8,925 9,371 9,840 Unit sales 11,500 14,375 17,969 22,461 Equipment cost 7750 8250 7250 Sales price per unit \$1.50 \$1.56 \$1.62 \$1.69 Sales price per unit \$1.25 \$1.30 \$1.35 \$1.41 Sales price per unit \$1.75 \$1.82 \$1.89 \$1.97 Salvage value, equipment, Year 4 639 639 639 Variable cost per unit (excl. depr.) \$1.07 \$1.10 \$1.14 \$1.17 Variable cost per unit (excl. depr.) \$1.17 \$1.21 \$1.24 \$1.28 Variable cost per unit (excl. depr.) \$0.97 \$1.00 \$1.03 \$1.06 Opportunity cost 0 0 0 Nonvariable costs (excl. depr.) 2120 2183.6 2249.108 \$2,317 Nonvariable costs (excl. depr.) 2330 2399.9 2471.897 \$2,546 Nonvariable costs (excl. depr.) 1910 1967.3 2026.319 \$2,087 Externalities (cannibalization) 0 0 0 Sales revenues = Units × Price/unit 15000 17940 21456.24 \$25,662 Sales revenues = Units × Price/unit 10625 11602.5 12669.93 \$13,836 Sales revenues = Units × Price/unit 20125 26162.5 34011.25 \$44,215 Units sold, Year 1 10,000 8,500 11,500 2250 2691 3218.436 ### \$0 1593.75 1740.375 1900.4895 2075.334534 \$0 3018.75 3924.375 5101.6875 6632.19375 \$0 Annual change in units sold, after Year 1 15% 5% 25% Basis for depreciation 7750 Basis for depreciation 8250 Basis for depreciation 7250 Sales price per unit, Year 1 \$1.50 \$1.25 \$1.75 Annual depreciation rate (MACRS) 33.33% 44.45% 14.81% 7.41% Annual depreciation rate (MACRS) 33.33% 44.45% 14.81% 7.41% Annual depreciation rate (MACRS) 33.33% 44.45% 14.81% 7.41% Annual change in sales price, after Year 1 4% 4% 4% Annual depreciation expense 2583.075 3444.875 1147.775 574.275 Annual depreciation expense 2749.725 ### 1221.825 611.325 Annual depreciation expense 2416.425 ### 1073.725 537.225 Variable cost per unit (VC), Year 1 \$1.07 \$1.17 \$0.97 Remaining undepreciated value 5166.925 1722.05 574.275 0 Remaining undepreciated value 5500.275 1833.15 611.325 0 Remaining undepreciated value 4833.575 1610.95 537.225 0 Annual change in VC, after Year 1 3% 3% 3% Cash Flow Forecast Cash Flows at End of Year Cash Flow Forecast Cash Flows at End of Year Cash Flow Forecast Cash Flows at End of Year Nonvariable cost (Non-VC), Year 1 2120 2330 1910 0 1 2 3 4 0 1 2 3 4 0 1 2 3 4 Annual change in Non-VC, after Year 1 3% 3% 3% Sales revenues = Units × Price/unit \$15,000 \$17,940 \$21,456 \$25,662 Sales revenues = Units × Price/unit \$10,625 \$11,603 \$12,670 \$13,836 Sales revenues = Units × Price/unit \$20,125 \$26,163 \$34,011 \$44,215 Project WACC 10% 10% 10% Variable costs = Units × Cost/unit \$10,700 \$12,674 \$15,013 \$17,782 Variable costs = Units × Cost/unit \$9,945 \$10,756 \$11,632 \$12,580 Variable costs = Units × Cost/unit \$11,155 \$14,362 \$18,491 \$23,807 Tax rate 40% 50% 30% Nonvariable costs (excluding depreciation) \$2,120 \$2,184 \$2,249 \$2,317 Nonvariable costs (excluding depreciation) \$2,330 \$2,400 \$2,472 \$2,546 Nonvariable costs (excluding depreciation) \$1,910 \$1,967 \$2,026 \$2,087 Working capital as % of next year's sales 15% 15% 15% Depreciation \$2,583 \$3,445 \$1,148 \$574 Depreciation \$2,750 \$3,667 \$1,222 \$611 Depreciation \$2,416 \$3,223 \$1,074 \$537 Key Results: Earnings before interest and taxes (EBIT) −\$403 −\$363 \$3,047 \$4,988 Earnings before interest and taxes (EBIT) −\$4,400 −\$5,220 −\$2,656 −\$1,902 Earnings before interest and taxes (EBIT) \$4,644 \$6,611 \$12,420 \$17,783 NPV \$1,048 −\$7,543 \$19,468 Taxes on operating profit (40% rate) −\$161 −\$145 \$1,219 \$1,995 Taxes on operating profit (40% rate) ### −\$2,610 −\$1,328 −\$951 Taxes on operating profit (40% rate) ### \$1,983 \$3,726 \$5,335 IRR 13.79% ### 62.41% Net operating profit after taxes −\$242 −\$218 \$1,828 \$2,993 Net operating profit after taxes −\$2,200 −\$2,610 −\$1,328 −\$951 Net operating profit after taxes \$3,251 \$4,627 \$8,694 \$12,448 MIRR 12.78% −22.23% 43.49% Add back depreciation \$2,583 \$3,445 \$1,148 \$574 Add back depreciation \$2,750 \$3,667 \$1,222 \$611 Add back depreciation \$2,416 \$3,223 \$1,074 \$537 Profitability index 1.10 0.23 2.90 Equipment purchases −\$7,750 Equipment purchases −\$8,250 Equipment purchases

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