CAPITAL BUDGETING WORKSHEET

Equity Analysis of a Project

INPUT SHEET: USER ENTERS ALL BOLD NUMBERS
INITIAL INVESTMENT

CASHFLOW DETAILS

Initial Investment=

$50,000

Revenues in year 1=

Opportunity cost (if any)=

$7,484

Var. Expenses as % of Rev=

Lifetime of the investment

10

Salvage Value at end of project=

Tax Credit (if any )=

Other invest.(non-depreciable)=

$40,000

Approach(1:Direct;2:CAPM)=

50%

Fixed expenses in year 1=

$10,000

Deprec. method(1:St.line;2:DDB)=

DISCOUNT RATE

1. Discount rate =

Tax rate on net income=

2a. Beta

40%

b. Riskless rate=

If you do not have the breakdown of fixed and variable

c. Market risk premium =

10%

expenses, input the entire expense as a % of revenues.

d. Debt Ratio =

e. Cost of Borrowing =
Discount rate used=

WORKING CAPITAL
Initial Investment in Work. Cap=

$10,000

Working Capital as % of Rev=

25%

Salvageable fraction at end=

100%

GROWTH RATES
1

Revenues

Do not enter

10.00%

10.00%

10.00%

10.00%

0.00%

0.00%

0.00%

Fixed Expenses

Do not enter

10.00%

10.00%

10.00%

10.00%

0.00%

0.00%

0.00%

CAPITAL BUDGETING WORKSHEET

Default: The fixed expense growth rate is set equal to the growth rate in revenues by default.
YEAR
0
1
2
3
4
INITIAL INVESTMENT
Investment
$50,000
- Tax Credit
$5,000
Net Investment
$45,000
+ Working Cap
$10,000
+ Opp. Cost
$7,484
+ Other invest.
$0
Initial Investment
$62,484
SALVAGE VALUE
Equipment
Working Capital
OPERATING CASHFLOWS
Lifetime Index
Revenues
-Var. Expenses
- Fixed Expenses
EBITDA
- Depreciation
EBIT
-Tax
EBIT(1-t)
+ Depreciation
- Work. Cap
NATCF
($62,484)
Discount Factor
1
Discounted CF
($62,484)

$0
$0

1
$40,000
$20,000
$0
$20,000
$10,000
$10,000
$4,000
$6,000
$10,000
$0
$16,000
1.10685
$14,455

Investment Measures
NPV =
$47,928
IRR =
23.55%
ROC =
60.12%

$0
$0

1
$44,000
$22,000
$0
$22,000
$8,000
$14,000
$5,600
$8,400
$8,000
$1,000
$15,400
1.225116923
$12,570

$0
$0

1
$48,400
$24,200
$0
$24,200
$6,400
$17,800
$7,120
$10,680
$6,400
$1,100
$15,980
1.356020666
$11,784

$0
$0

1
$53,240
$26,620
$0
$26,620
$5,120
$21,500
$8,600
$12,900
$5,120
$1,210
$16,810
1.500911474
$11,200

$0
$0

1
$58,564
$29,282
$0
$29,282
$4,096
$25,186
$10,074
$15,112
$4,096
$1,331
$17,877
1.661283865
$10,761

$0
$0

1
$58,564
$29,282
$0
$29,282
$3,277
$26,005
$10,402
$15,603
$3,277
$0
$18,880
1.838792046
$10,268

$0
$0

1
$58,564
$29,282
$0
$29,282
$2,621
$26,661
$10,664
$15,996
$2,621
$0
$18,618
2.035266976
$9,148

$0
$0

1
$58,564
$29,282
$0
$29,282
$486
$28,796
$11,518
$17,278
$486
$0
$17,764
2.252735252
$7,885

CAPITAL BUDGETING WORKSHEET

Book Value (beginning)

Depreciation

$50,000
$10,000

$40,000
$8,000

BOOK VALUE & DEPRECIATION

$32,000
$25,600
$20,480
$6,400
$5,120
$4,096

$16,384
$3,277

$13,107
$2,621

$10,486
$486

CAPITAL BUDGETING WORKSHEET

BV(ending)

$50,000

$40,000

$32,000

$25,600

$20,480

$16,384

8
$13,107

$10,486

$10,000

CAPITAL BUDGETING WORKSHEET

2
10%
0.9
8.00%
5.50%
30.00%
9.00%
10.69%

10

0.00%

0.00%

0.00%

0.00%

CAPITAL BUDGETING WORKSHEET

$0
$0

1
$58,564
$29,282
$0
$29,282
$0
$29,282
$11,713
$17,569
$0
$0
$17,569
2.493440014
$7,046

10

$10,000
$14,641

1
$58,564
$29,282
$0
$29,282
$0
$29,282
$11,713
$17,569
$0
$0
$17,569
2.759864079
$15,294

10

CAPITAL BUDGETING WORKSHEET

$10,000
$0

$10,000
$0

11

CAPITAL BUDGETING WORKSHEET

$10,000

$10,000

12