a.

CF -500
Tine 5 years
Discount rate 10%

PV $310.46

b.
PV $1,895.39

c.
Time 50 years
PV $4,957.41

d.
Time 100 years
PV $4,999.64
a.
Years 2014 2015
CAPEX 875 1322 million
Change in net working capital -102 430
Tax rate 40%

Year 2013 2014 2015

Sales 12211 13368
Cost of goods sold 9755 10591
Gross profit 2456 2777
Selling , general , and administrative expense 704 698
Operating income before depreciation 1752 2079
Depreciation , depletion , and amortization 794 871
Operating profit 958 1208
Interest expense 265 295
Nonoperating income or expense 139 151
Special items 20
Pretax income 852 1064
Taxes 340.8 425.6
Net income 511.2 638.4
EBIT 958 1208
Taxes 383.2 483.2
NOPAT 574.8 724.8
Depreciation Expense 794 871
CAPEX 875 1322
Change in net working capital -102 -102 430
FCF 391.8 703.8

b. Grow at 10% CAPEX 1000

Years 2015 2016 2017 2018 2019
EBIT 1328.8 1461.68 1607.848 1768.633
Taxes 531.52 584.672 643.1392 707.4531
NOPAT 797.28 877.008 964.7088 1061.18
Depreciation 1003.2 1103.2 1203.2 1303.2
CAPEX 1000 1000 1000 1000
Change in net working capital -100 0 0 0 0
FCF -100 800.48 980.208 1167.909 1364.38

Years 2015 2016 2017 2018 2019

Net working capital 100 100 100 100
Change in net working capital -100 0 0 0 0
Net working capital 100 Per year
2020
1945.496
778.1984
1167.298
1403.2
1000
100
1670.498

2020
100
100
a.
Sales 900000 per year
FC 120000
CAPEX 1860000
Taxes 30%
n 5 years
Years 0 1 2 3 4 5
Sales 900000 900000 900000 900000 900000
FC 120000 120000 120000 120000 120000
Depreciation expense 372000 372000 372000 372000 372000
EBIT 408000 408000 408000 408000 408000
Taxes 122400 122400 122400 122400 122400
NOPAT 285600 285600 285600 285600 285600
Depreciation expense 372000 372000 372000 372000 372000
CAPEX -1860000
Change in net working capital 0 0 0 0 0 0
FCF -1860000 657600 657600 657600 657600 657600

Discount Rate 9%
NPV $697,834.67 >0 Accept
n 5 years
CAPEX 65000
Taxes 30%
Cost of capital 9%
Total cost 15000 per year
6000 hours per year Time 25%
25 per hour
Years 0 1 2 3 4 5
Cost saving 37500 37500 37500 37500 37500
Total cost 15000 15000 15000 15000 15000
Depreciation expense 0 0 0 0 0
EBIT 22500 22500 22500 22500 22500
Taxes 6750 6750 6750 6750 6750
NOPAT 15750 15750 15750 15750 15750
Depreciation expense 0 0 0 0 0
CAPEX -65000
Change in net working capital 0 0 0 0 0
FCF -65000 15750 15750 15750 15750 15750

NPV
CAPEX 600000
n 5 years
Tax rate 30%
Recycle 100000 grow 25% per year
Price per unit 1.5

Year 1 2 3 4 5
Unit recycled 100000 125000 156250 195312.5 244140.6
Revenue 150000 187500 234375 292968.8 366210.9

Year 0 1 2 3 4 5
Revenue 150000 187500 234375 292968.8 366210.9
Depreciation expense 120000 120000 120000 120000 120000
EBIT 30000 67500 114375 172968.8 246210.9
Taxes 9000 20250 34312.5 51890.63 73863.28
NOPAT 21000 47250 80062.5 121078.1 172347.7
Depreciation expense 120000 120000 120000 120000 120000
CAPEX -600000
Change in net working capital 0 0 0 0 0
FCF -600000 141000 167250 200062.5 241078.1 292347.7

c.
Unit recycled 75000 First year Grow 25% per year

Year 1 2 3 4 5
Unit recycled
Revenue

Year 0 1 2 3 4 5
Revenue
Depreciation expense
EBIT
Taxes
NOPAT
Depreciation expense
CAPEX
Change in net working capital
FCF

d.
Price per unit 0.2
Year 1 2 3 4 5
Unit recycled
Total cost
Revenue

Year 0 1 2 3 4 5
Revenue
Total cost
Depreciation expense
EBIT
Taxes
NOPAT
Depreciation expense
CAPEX
Change in net working capital
FCF
b. NPV
CAPEX 260000 CAPEX 100000 Five years late
n 10 years
Operating cost 70000 per year
Tax rate 30%
Cost of capital 12%

Years 0 1 2 3 4 5 6
Net fixed asset (at beginning)
Plus : CAPEX
Less : Depreciation Expense
Net fixed asset (at the end)

Year 0 1 2 3 4 5 6
Operating cost
Depreciation expense
Operating income
Taxes
NOPAT
Depreciation expense
Salvage value
CAPEX
FCF
7 8 9 10

7 8 9 10
TVC 45% Revenue
FC 1000 year
CAPEX 4000
n 5 years
r 15%
Tax rate 38%

Year 1 2 3 4 5
Sale unit
Unit price
Revenue

Year 0 1 2 3 4 5
Revenue
TVC
FC
Depreciation expense
EBIT
Taxes
NOPAT
Depreciation expense
Salvage value
CAPEX
Change in net working capital
FCF

Year 0 1 2 3 4 5
Net working capital
Change in net working capital