Net Fixed Asset Investment 2300000

Years 0 1 2 3 4 5
Incremental Income 600000 600000 600000 600000 600000
Depreciation new machine -460000 -460000 -460000 -460000 -460000
Depreciation old machine 200000 200000 200000
EBIT 340000 340000 340000 140000 140000
Taxes -102000 -102000 -102000 -42000 -42000
Net Income 238000 238000 238000 98000 98000
Depreciation new machine 460000 460000 460000 460000 460000
Depreciation old machine -200000 -200000 -200000 0 0
net cash flow 498000 498000 498000 558000 558000

Inv. -80000 80000

Investment Flow -1710000 0 0 0 0 80000

Free Cash Flow -1710000 498000 498000 498000 558000 638000

NPV NT$63,283.18

IRR 16.49%

Profitability Index 0.3247242742992

Como la TIR es mayor que la tasa de descuento si se realiza el proyecto , como el NPV es positivo , tambien
puedes realizar el proyecto pero como el PI es menor que 1 no se debería realizar el proyecto
Mistake the three methods agree on the decision to develop the project
 Tax income 30%
Old machine costed 1000000
Useful life 5
Annual depreciation 200000

Old machine is 2 years

Cumulative depreciation 400000
Book value of old machine 600000
Current price of old machine 700000
Points 0.5
Cost of new machine 2000000
Installation cost 300000
Total cost of new machine 2300000
Operating savings 600000

15%

Points 1

Cost of new machine 2300000

Current price old machine 700000
Points 1 Book value old machine 600000
Capital gain 100000
Points 1 Tax savings due to capital 30000
sale of old machine -700000
initial investmet is 1630000
Discount rate 15%
Points 0.5

Points 0.5

Points 0
Points 0.4

Total 4.9
 Cash Flows
Periods Project 1 Project 2
0 -30,000 -5,000
1 15,000 2,800
2 15,000 2,800
3 15,000 2,800

PV at year 1 150000 28000

PV at year 0 136363.63636 25454.545
Inv year 0 -30000 -5000

NPV 106363.64 20454.545

Es mejor escoger el proyecto 1 Your answer is right but you have wrongly ap
 Points 0

Points 1

Why do you discount only by dividing by 10%, it is not perpetual inflow

er is right but you have wrongly applied the NPV rule

Points

Points
Total 1
Years 0 1 2 3 4 5
sales 2700000 4800000 6000000 4500000 3000000
cost -1800000 -3200000 -4000000 -3000000 -2000000
depreciation -800000 -800000 -800000 -800000 -800000
EBIT 100000 800000 1200000 700000 200000
taxes -40000 -320000 -480000 -280000 -80000
net profit 60000 480000 720000 420000 120000
depreciation 800000 800000 800000 800000 800000
Net Cash Flow 860000 1280000 1520000 1220000 920000
-4000000
1500000
-600000
And t?he net working capital investment?
Investment Flow

Free Cash Flow

NPV
 sales increa 10%
production cost 2
price 3
depreciation 800000
tax rate 40%

Points 0.6666667

Points 0.5

Points

Points

Points
Points

Points

Total 1.1666667
Expected Return

Standard Deviation
 Points

Points

Total Points 0
Pregunta Puntos
1 4.9
2 1
3 1.1666667
4 0
Total 7