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    Naomi Alberg-Blijd
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    The document presents a case study comparing the straight line and written down value depreciation methods. It shows the profit and loss, earnings before interest and taxes, earnings before taxes, profit after taxes and net cash flow for 8 years using both methods. The straight line method depreciates at a fixed amount each year, while the written down value method depreciates at 15% of the reducing value each year. The written down value method results in higher profit after taxes and net cash flow in each year compared to the straight line method.

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    CASE_STUDY_SOLUTION.xlsx.pdf

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    The document presents a case study comparing the straight line and written down value depreciation methods. It shows the profit and loss, earnings before interest and taxes, earnings before taxes, profit after taxes and net cash flow for 8 years using both methods. The straight line method depreciates at a fixed amount each year, while the written down value method depreciates at 15% of the reducing value each year. The written down value method results in higher profit after taxes and net cash flow in each year compared to the straight line method.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    74 views6 pages

    Case Study Solution PDF

    Uploaded by

    Naomi Alberg-Blijd
    The document presents a case study comparing the straight line and written down value depreciation methods. It shows the profit and loss, earnings before interest and taxes, earnings before taxes, profit after taxes and net cash flow for 8 years using both methods. The straight line method depreciates at a fixed amount each year, while the written down value method depreciates at 15% of the reducing value each year. The written down value method results in higher profit after taxes and net cash flow in each year compared to the straight line method.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 6

     CASE STUDY SOLUTION.xlsx.

    xlsx ­ Sheet1

     STRAIGHT LINE METHOD
     Year 1  Year 2  Year 3  Year 4  Year 5  Year 6  Year 7  Year 8
     DASH  Units  9000  9000  10350  11700  13050  14400  15750  17100  18450
     (A)  SP/Unit  1000  9000000  10350000 11700000 13050000 14400000 15750000 17100000 18450000

    a
     Thriller  Units  7000  7000  8050  9100  10150  11200  12250  13300  14350

    vi
    (  B)  SP/Unit  2000  14000000 16100000 18200000 20300000 22400000 24500000 26600000 28700000
     (A)+(B)  Total SP/Unit  23000000 26450000 29900000 33350000 36800000 40250000 43700000 47150000

    d
     (­) COGS  65% of SP  14950000 17192500 19435000 21677500 23920000 26162500 28405000 30647500

    e
     P&L / Unit  35% of SP  8050000  9257500  10465000 11672500 12880000 14087500 15295000 16502500

    ar
     (­) Depreciation SLM  6250000  6250000  6250000  6250000  6250000  6250000  6250000  6250000
     E.B.I.T  1800000  3007500  4215000  5422500  6630000  7837500  9045000  10252500

    sh
     (­) Interest  8% of 1Cr  800000  800000  800000  800000  800000  800000  800000  800000
     E.B.T  1000000  2207500  3415000  4622500  5830000  7037500  8245000  9452500

    as
     (­) TAX  40%  400000  883000  1366000  1849000  2332000  2815000  3298000  3781000
     P.A.T  600000  1324500  2049000  2773500  3498000  4222500  4947000  5671500

    w
     (+) Depreciation  6250000  6250000  6250000  6250000  6250000  6250000  6250000  6250000
     Net Cash Flow  6850000  7574500  8299000  9023500  9748000  10472500 11197000 11921500

    m e
     WRITTEN DOWN VALUE METHOD co rc
    o. ou
     Year 1  Year 2  Year 3  Year 4  Year 5  Year 6  Year 7  Year 8
     DASH  Units  9000  9000  10350  11700  13050  14400  15750  17100  18450  WDM
    er res

     (A)  SP/Unit  1000  9000000  10350000 11700000 13050000 14400000 15750000 17100000 18450000  Value


     Thriller  Units  7000  7000  8050  9100  10150  11200  12250  13300  14350   ear 0
    Y  50000000
    (  B)  SP/Unit  2000  14000000 16100000 18200000 20300000 22400000 24500000 26600000 28700000  Year 1  42500000
    eH y

     (A)+(B)  Total SP/Unit  23000000 26450000 29900000 33350000 36800000 40250000 43700000 47150000  Year 2  36125000


    rs d

     (­) COGS  65% of SP  14950000 17192500 19435000 21677500 23920000 26162500 28405000 30647500  Year 3  30706250


    stu

     P&L / Unit  35% of SP  8050000  9257500  10465000 11672500 12880000 14087500 15295000 16502500  Year 4  26100312.5


     (­) Depreciation WDM @15% 7500000  6375000  5418750  4605937.5 3915046.875  3327789.84
     2828621.367
     2404328.163  Year 5  22185265.63
     E.B.I.T  550000  2882500  5046250  7066562.5 8964953.125
     10759710.16
     12466378.63
     14098171.84  Year 6  18857475.79
    is

     (­) Interest  8% of 1Cr  800000  800000  800000  800000  800000  800000  800000  800000  Year 7  16028854.42
    Th

    https://www.coursehero.com/file/61685502/CASE-STUDY-SOLUTIONxlsxpdf/  1
     CASE STUDY SOLUTION.xlsx.xlsx ­ Sheet1

    a
    vi
    e d
    ar
    sh
    as
    w
    m e
    co rc
    o. ou
    er res

     WDM @15%
     NA
     7500000
    eH y

     6375000
    rs d

     5418750
    stu

     4605937.5
     3915046.875
     3327789.84
    is

     2828621.367
    Th

    https://www.coursehero.com/file/61685502/CASE-STUDY-SOLUTIONxlsxpdf/  2
     CASE STUDY SOLUTION.xlsx.xlsx ­ Sheet1

      .B.T
    E ­  250000  2082500   246250
    4   266562.5 8164953.125
    6  9959710.16  11666378.63  13298171.84  Year 8  13624526.26
     (­) TAX  40%  ­100000  833000  1698500  2506625  3265981.25  3983884.064  4666551.453  5319268.735
     P.A.T  ­150000  1249500  2547750  3759937.5 4898971.875 5975826.096  6999827.18  7978903.102
     (+) Depreciation  7500000  6375000  5418750  4605937.5 3915046.875 3327789.84  2828621.367  2404328.163

    a
     Net Cash Flow  7350000  7624500  7966500  8365875  8814018.75  9303615.936  9828448.547  10383231.27

    vi
    e d
    ar
    sh
    as
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    m e
    co rc
    o. ou
    er res
    eH y
    rs d
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    Th

    https://www.coursehero.com/file/61685502/CASE-STUDY-SOLUTIONxlsxpdf/  3
     CASE STUDY SOLUTION.xlsx.xlsx ­ Sheet1

     2404328.163

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    https://www.coursehero.com/file/61685502/CASE-STUDY-SOLUTIONxlsxpdf/  4
     CASE STUDY SOLUTION.xlsx.xlsx ­ Sheet2

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    https://www.coursehero.com/file/61685502/CASE-STUDY-SOLUTIONxlsxpdf/  5
     CASE STUDY SOLUTION.xlsx.xlsx ­ Sheet3

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    https://www.coursehero.com/file/61685502/CASE-STUDY-SOLUTIONxlsxpdf/  6
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