Capital Budgeting Assignment #10 Tucker Hess

cost of asset
installation/testing
MACRS
economic life
sales
sales growth rate
fixed cost
COGS
change in NWC
selling price
TAX RATE
WACC

100,000.00
40,000.00
5
6
200,000.00
5% until 6th year
25,000.00
75%
10,000.00
60,000.00
40%
9.50%

year
1
2
3
4
5
6

depr
28,000.00
44,800.00
26,880.00
16,100.00
16,100.00
8,120.00

Year
Revenues
COGS
Fixed Cost
EBITDA
Less Depr
EBIT
Less Taxes
NI
add back depr
OCF
Asset
Change in NWC
cash from asset
^^ #2 ^^
NPV
IRR
PI

(140,000.00)
(10,000.00)
(150,000.00)
initial cost
$

1,540.14
9.81%
1.01

1
200,000.00
150,000.00
25,000.00
25,000.00
28,000.00
(3,000.00)
(1,200.00)
(1,800.00)
28,000.00
26,200.00

2
210,000.00
157,500.00
25,000.00
27,500.00
44,800.00
(17,300.00)
(6,920.00)
(10,380.00)
44,800.00
34,420.00

26,200.00

34,420.00

#5

depr base
acc depr
book value
selling price

140,000.00
131,880.00
8,120.00
60,000.00

8,120.00

gain/(loss)
tax conseq

51,880.00
20,752.00 tax liab

ATS

39,248.00 #4

sp-t*(sp-(depr base-acc depr))

selling price or MV
book value
gain/loss
tax conseq
ATS

39,248.00

BONUS
5,000.00
24,220.00
(19,220.00)
(7,688.00) tax savings
12,688.00

24,220.00
24,220.00

#BONUS

3
220,500.00
165,375.00
25,000.00
30,125.00
26,880.00
3,245.00
1,298.00
1,947.00
26,880.00
28,827.00

4
231,525.00
173,643.75
25,000.00
32,881.25
16,100.00
16,781.25
6,712.50
10,068.75
16,100.00
26,168.75

5
243,101.25
182,325.94
25,000.00
35,775.31
16,100.00
19,675.31
7,870.13
11,805.19
16,100.00
27,905.19

28,827.00

26,168.75

27,905.19

3-year
0.333
0.445
0.148
0.074

5-year
0.2
0.32
0.192
0.115
0.115
0.058

Year
1
2
3
4
5
6

#3

6
243,101.25
182,325.94
25,000.00
35,775.31
131,880.00
35,775.31
14,310.13
21,465.19
21,465.19 #1
39,248.00 ats
10,000.00 nwc
70,713.19

7-year
0.143
0.245
0.175
0.125
0.089
0.089

10-year
0.1
0.18
0.144
0.115
0.092
0.074

7
8
9
10

0.089
0.045

0.066
0.066
0.065
0.065

TCF(6)

49,248.00