sales

growth
per
year

sales
2012

sales
2013
assets
(end of
2012) sales growth per
year
sales 2012 8
sales 2013 9
assets (end of
2012) 7
assert growth FIN
per year 3085

1 Note:
Proble 3- MODIF Modifications in
m: 9 IED Orange

Note:
Inputs in
Blue
BO OL NE
TH D W

Cost of new 14,

machine 000

BV old 3,9
machine 00

Salvage Value (sale) - 4,5

today 00

Salvage Value (sale) - 1,5

end of useful life 800 00
Useful life
remaining 6 6

Sales increase new 2,0

machine 00
Reduction in
 1,9
OPEX 00
Working
Capital
impact:

6
5.76
%

806

650

156

0 1 2 3 4 5 6
New
Machine (14,0
Cost 00)
Sale of old
Machine 4,500
Tax on sale of old
machine (210)

Increased Sales 2,0 2,0 2,0 2,0 2,0 2,0

Revenues 00 00 00 00 00 00

Decreased 1,9 1,9 1,9 1,9 1,9 1,9

OPEX 00 00 00 00 00 00

Change in Depn (new (2,1 (3,8 (2,0 (96 (96 (15

vs. old) 50) 30) 38) 3) 3) 6)

Change in 1,7 1,8 2,9 2,9 3,7

Operating Income 50 70 62 37 37 44

1,0 1,0 1,3

Taxes 613 25 652 28 28 10
Change in After-
Tax Operating 1,1 1,2 1,9 1,9 2,4
Income 38 46 10 09 09 33

Add back: Change in 2,1 3,8 2,0 96 96 15

Depn 50 30 38 3 3 6
 Change in Working (2,20 2,2
Capital 0) 00

Sale (salvage value) of 1,5

new machine 00

Tax on sale of new (52

machine 5)
Opportunity cost of not
selling old machine YR (80
6 0)
Tax effect of
opportunity cost of not
selling old machine YR 28
6             0

Incremental Free Cash (11,9 3,2 3,8 3,2 2,8 2,8 5,2
Flow 10) 88 76 48 72 72 45

$2,53
NPV 8.85

current liabilities FIN

3085

1 Note:
Probl 3- MODI Modifications
em: 9 FIED in Orange

Note:
Inputs in
Blue
BO OL NE
TH D W
Cost of
new 14,
machine 000

BV old 3,9
machine 00

Salvage Value (sale) 4,5

- today 00
Salvage Value
(sale) - end of useful 1,5
life 800 00
Useful life
remaining 6 6

Sales increase new 2,0

machine 00

Reduction 1,9
in OPEX 00
Working
Capital
impact:

Increase in 2,9
inventories 00
Increa
se in
A/P 700
35.
Tax 00
rate %
12.
00
WACC %
Depreciatio
n: 1 2 3 4 5 6
20. 32. 19. 11. 11.
Depn rate new 00 00 20 52 52 5.7
machine % % % % % 6%
Depn -
new
machi 2,8 4,4 2,6 1,6 1,6 80
ne 00 80 88 13 13 6
Depn -
old
machi 65
ne 650 650 650 650 650 0
Chang
e in 2,1 3,8 2,0 15
Depn 50 30 38 963 963 6

Incremental FCF
after replacement of
old machine:
0 1 2 3 4 5 6
New
Machine (14,0
Cost 00)

Sale of old 4,50

Machine 0
Tax on sale of old
 machine (210)

Increased Sales 2,0 2,0 2,0 2,0 2,0 2,0

Revenues 00 00 00 00 00 00

Decreased 1,9 1,9 1,9 1,9 1,9 1,9

OPEX 00 00 00 00 00 00

Change in Depn (2,1 (3,8 (2,0 (96 (96 (15

(new vs. old) 50) 30) 38) 3) 3) 6)
Change in
Operating 1,7 1,8 2,9 2,9 3,7
Income 50 70 62 37 37 44
Taxes
Change in After-
Tax Operating
Income
Add back: Change in
Depn

Change in Working (2,20

Capital 0)
Sale (salvage value)
of new machine
Tax on sale of new
machine
Opportunity cost of
not selling old
machine YR 6
Tax effect of
opportunity cost of
not selling old
machine YR 6  

Incremental Free (11,9

Cash Flow 10)

$2,5
38.8
NPV 5

accounts
payable
notes payable
accrurals

after tax profit

margin
payout ratio
 Additional Funds Needed = Increase in Assets - Increase in Spontaneous Liabilities - Increase in Retained Ear

The AFN in problem 2 is higher than the one found in problem 1 for several reasons. First, from a mathmatical
funds than before becasue the requoired increase in assets that the comapny needs increased by 2,000,000 d
assert
growth
per
year
current
liabilitie
s
accoun
ts
payabl
e
notes
payabl
e
accrur
als

after
tax
profit
margin
payout
ratio

The War of 1812 (18 June 1812 – 17 February 1815) was fought by the United States of
America and its indigenous allies against the United Kingdom and its allies in British North America,
with limited participation by Spain in Florida. It began when the US declared war on 18 June 1812
and, although peace terms were agreed upon in the December 1814 Treaty of Ghent, did not
American citizenship certificates. [14] Opinion was split on how to respond, and although majorities in
both the House and Senate voted for war, they divided along strict party lines, with the Democratic-
Republican Party in favour and the Federalist Partyagainst.[d][15] News of British concessions made in
an attempt to avoid war did not reach the US until late July, by which time the conflict was already
underway.
At sea, the far larger Royal Navy imposed an effective blockade on US maritime trade, while
between 1812 to 1814 British regulars and colonial militia defeated a series of American attacks
on Upper Canada.[16] This was balanced by the US winning control of the Northwest Territory with
victories at Lake Erie and the Thames in 1813. The abdication of Napoleon in early 1814 allowed the
British to send additional troops to North America and the Royal Navy to reinforce their blockade,
crippling the American economy.[17] In August 1814, negotiations began in Ghent, with both sides
wanting peace; the British economy had been severely impacted by the trade embargo, while the
Federalists convened the Hartford Convention in December to formalise their opposition to the war.
In August 1814, British troops burned Washington, before American victories
at Baltimore and Plattsburgh in September ended fighting in the north. It continued in
the Southeastern United States, where in late 1813 a civil war had broken out between
a Creek faction supported by Spanish and British traders and those backed by the US. Supported by
American militia under General Andrew Jackson, they won a series of victories, culminating in the
capture of Pensacola in November 1814.[18] In early 1815, Jackson defeated a British attack on New
Orleans, catapulting him to national celebrity and later victory in the 1828 United States presidential
election.[19] News of this success arrived in Washington at the same time as that of the signing of the
Treaty of Ghent, which essentially restored the position to that prevailing before the war. While
Britain insisted this included lands belonging to their Native American allies prior to 1811, Congress
did not recognize them as independent nations and neither side sought to enforce this requirement.
The War of 1812 (18 June 1812 – 17 February 1815) was fought by the United States of
America and its indigenous allies against the United Kingdom and its allies in British North America,
with limited participation by Spain in Florida. It began when the US declared war on 18 June 1812
and, although peace terms were agreed upon in the December 1814 Treaty of Ghent, did not
officially end until the peace treaty was ratified by Congress on 17 February 1815.[12][13]
Tensions originated in long-standing differences over territorial expansion in North America and
British support for Native American tribes who opposed US colonial settlement in the Northwest
Territory. These escalated in 1807 after the Royal Navy began enforcing tighter restrictions on
American trade with France, exacerbated by the impressment of men claimed as British subjects,
even those with American citizenship certificates. [14] Opinion was split on how to respond, and
although majorities in both the House and Senate voted for war, they divided along strict party lines,
with the Democratic-Republican Party in favour and the Federalist Partyagainst.[d][15] News of British
concessions made in an attempt to avoid war did not reach the US until late July, by which time the
conflict was already underway.
At sea, the far larger Royal Navy imposed an effective blockade on US maritime trade, while
between 1812 to 1814 British regulars and colonial militia defeated a series of American attacks
on Upper Canada.[16] This was balanced by the US winning control of the Northwest Territory with
victories at Lake Erie and the Thames in 1813. The abdication of Napoleon in early 1814 allowed the
British to send additional troops to North America and the Royal Navy to reinforce their blockade,
crippling the American economy.[17] In August 1814, negotiations began in Ghent, with both sides
wanting peace; the British economy had been severely impacted by the trade embargo, while the
Federalists convened the Hartford Convention in December to formalise their opposition to the war.
In August 1814, British troops burned Washington, before American victories
at Baltimore and Plattsburgh in September ended fighting in the north. It continued in
the Southeastern United States, where in late 1813 a civil war had broken out between
a Creek faction supported by Spanish and British traders and those backed by the US. Supported by
American militia under General Andrew Jackson, they won a series of victories, culminating in the
capture of Pensacola in November 1814.[18] In early 1815, Jackson defeated a British attack on New
Orleans, catapulting him to national celebrity and later victory in the 1828 United States presidential
election.[19] News of this success arrived in Washington at the same time as that of the signing of the
Treaty of Ghent, which essentially restored the position to that prevailing before the war. While
Britain insisted this included lands belonging to their Native American allies prior to 1811, Congress
did not recognize them as independent nations and neither side sought to enforce this requirement.