IM&C GUANO PROJECT

The following worksheet contains the same information as Tables 6-2 through 6-7 in Brealey-Myers.
You can use this worksheet as a template for most capital budgeting problems.
Cost of capital
Year
Depreciation (for taxes)
Net working capital
Change in net working capital
Net property, plant & equipment
Sales
Less COGS
Less depreciation
Less other costs
EBIT
Less taxes @ 35%
EBIAT
Plus depreciation
Less change in net working capital
Cash flow from operations
Less capital investment
Plus capital disposal
Less taxes on capital disposal
Net cash flow
Present value factor
PV of cash flow
Cumulative PV
Net present value

20%
0

1

2

3

4

5

6

10,000

20.00%
550
550
8,000

32.00%
1,289
739
4,800

19.20%
3,261
1,972
2,880

11.52%
4,890
1,629
1,728

11.52%
3,583
(1,307)
576

5.76%
2,002
(1,581)
-

523
(837)
(2,000)
(2,200)
(4,514)
1,580
(2,934)
2,000
(550)
(1,484)
(1,484)
83%
(1,237)
(13,837)

12,887
(7,729)
(3,200)
(1,210)
748
(262)
486
3,200
(739)
2,947
2,947
69%
2,047
(11,790)

32,610
(19,552)
(1,920)
(1,331)
9,807
(3,432)
6,375
1,920
(1,972)
6,323
6,323
58%
3,659
(8,131)

48,901
(29,345)
(1,152)
(1,464)
16,940
(5,929)
11,011
1,152
(1,629)
10,534
10,534
48%
5,080
(3,051)

35,834
(21,492)
(1,152)
(1,611)
11,579
(4,053)
7,526
1,152
1,307
9,985
9,985
40%
4,013
962

19,717
(11,830)
(576)
(1,772)
5,539
(1,939)
3,600
576
1,581
5,757
5,757
33%
1,928
2,890

(4,000)
(4,000)
1,400
(2,600)
(2,600)
(10,000)
(12,600)
100%
(12,600)
(12,600)
3,802

7

(2,002)

2,002
2,002
1,949
(682)
3,269
28%
912
3,802

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