Info about old machinery

Have been using for 5 years

Straight line 0 salvage
Initial purchase Price 400000
Remaining useful life 0 years
Selling price now 0
Selling price after 4 years 0
annual Production 10000 units
Production Cost 20
Increase in cost 10% yearly
Selling Price 40
Increase in sp 5% yearly
Info about operations
Change in annual sales
Change in annual expences
Installing and modification to be capitalized
Networking capital needs
Marginal tax rate 34%
RRR 15%

Annual Depreciation 80000

Accumulated Depreciation 400000
Gain or Loss 0
 0 1 2 3 4 5
Initial investment CF -400000
Selling of old 0
Tax Effect 0
Production
Goods

II Marginal CF
Change in annual sales 400000 420000 441000 463050 486202.5
Change in annual expences -200000 -220000 -242000 -266200 -292820
Change in depreciation -80000 -80000 -80000 -80000 -80000
Change in EBT 120000 120000 119000 116850 113382.5
Change in Tax 30% -40800 -40800 -40460 -39729 -38550.05
Change in NI 79200 79200 78540 77121 74832.45
AddBack Depreciation 80000 80000 80000 80000 80000
Total Marginal CF -400000 159200 159200 158540 157121 154832.4

III Terminal CF
Sales 0
Tax 0
Return of NWC 0
Opportunity cost of selling old 0
Opp Cost of Tax 0
Total Cash Flows -400000 159200 159200 158540 157121 154832.4
PV of Cash Flows -400000 138434.8 120378.1 104242.6 89834.44 76979.09
NPV 129869.012
IRR 28.1%
Info about old machinery
Have been using for 4 years
Straight line 12000 salvage
Initial purchase Price 172000
Remaining useful life 4 years
Selling price now 62000
Selling price after 4 years 16000
Info about new machinery
Purchase price 250000
Estimated life 4 years
MACRS 3 years class
Sales price after 4 years 0 ungiven
Info about operations
Change in annual sales 68000
Change in annual expences 24000
Installing and modification 14000 to be capitalized
Networking capital needs 25000
Marginal tax rate 30%
RRR 14%

Annual Depreciation 20000

Accumulated Depreciation 80000
Gain or Loss -30000

Change in Depreciation
Year 1 -67120
Year 2 -98800
Year 3 -19600
Year 4 1520
 0 1 2 3 4
Initial investment CF
Selling of old 62000
Tax Effect 9000
Purchase of New machinery -250000
Installation and modification -14000
New Working Capital Needs -25000

II Marginal CF
Change in annual sales 68000 68000 68000 68000
Change in annual expences -24000 -24000 -24000 -24000
Change in depreciation -67120 -98800 -19600 1520
Change in EBT -23120 -54800 24400 45520
Change in Tax 30% -6936 -16440 7320 13656
Change in NI -16184 -38360 17080 31864
AddBack Depreciation 67120 98800 19600 -1520
Total Marginal CF -218000 50936 60440 36680 30344

III Terminal CF
Sales 0
Tax 0
Return of NWC 25000
Opportunity cost of selling old -16000
Opp Cost of Tax 1200
Total Cash Flows -218000 50936 60440 36680 40544
PV of Cash Flows -218000 44680.7 46506.62 24757.96 24005.3
NPV -78049.423
IRR -5.9%
inv 32000000 0 1 2
Tax 34% Initial investment CF -32000000
P 400 Selling of old
inf p 3% Tax Effect
labour 15 Production
labour inf 2% Goods
energy 55
energy inf 3%
k 12% II Marginal CF
Change in annual sales 40000000 82400000
dep ann 8000000 Change in lab -30000000-30600000
Change in en -11000000-11330000
Change in depreciation -8000000 -8000000
Change in EBT -9000000 32470000
Change in Tax 30% 3060000-11039800
Change in NI -5940000 21430200
AddBack Depreciation 8000000 8000000
100000 200000 200000 150000 Total Marginal CF -32000000 2060000 29430200
2000000 PV -32000000 1839285.7 23461575
200000 25796396.772646
40%
 3 4

84872000 65563620
-31212000 -31836240
-11669900 -12019997
-8000000 -8000000
33990100 13707383
-11556634 -4660510
22433466 9046872.8
8000000 8000000
30433466 17046873
21661940 10833596
debt 40.0 48.3 53.5 56.4 61.8
eq 40.0 47.7 56.9 65.1 71.8
assets 80.0 96.0 110.4 121.4 133.6

sales 100.0 120.0 138.0 151.8 167.0

ebit 20.0 24.0 24.8 24.3 26.7
int ex 4.0 4.8 5.4 5.6 6.2
ebt 16.0 19.2 19.5 18.7 20.5
tax 6.4 7.7 7.8 7.5 8.2
NI 9.6 11.5 11.7 11.2 12.3
payout 1.9 2.3 3.5 4.5 6.2
Retain Er. 7.7 9.2 8.2 6.7 6.2

dps
 0 1 2
Purch. Price 50000 Initial investment CF
Modify 10000 Purchase -50000
MACRS 3 Installling and Modification -10000
Sales Price 20000 NWC needs -2000
NWC needs 2000
Expences -20000 II Marginal CF
Tax 40% Change in annual sales 0 0
k 10% Change in annual expences 20000 20000
Change in depreciation -19800 -27000
Change in EBT 200 -7000
MACRS Change in Tax 40% 80 -2800
year 1 19800 Change in NI 120 -4200
Year 2 27000 AddBack Depreciation 19800 27000
Year 3 9000 Total Marginal CF 19920 22800
Year 4 4200
III Terminal CF
Sales
Tax
Return of NWC
Opportunity cost of selling old
Opp Cost of Tax
Total Cash Flows
risk palisade PV of Cash Flows
NPV
IRR
 3

0
20000
-9000
11000
4400
6600
9000
15600

20000
New machinery #NAME?
Selling price #NAME?
Inflation 4%
Variable Operating costing #NAME?
Fixed Operating costs 60000 per year NPV #NAME?
VC,FC Inflation 5%
Useful life 4 Years
K 10%
Tax 25%
K

1 2 3 4
demand 2000 1500 1000 2000
Working Capital 30000 20000 25000 0

depreciation Book v. b. dep. Ex Book value

decining balance method #NAME? #NAME? #NAME?
#NAME? #NAME? #NAME?
#NAME? #NAME? #NAME?
#NAME? #NAME? #NAME?

Sensitivity Analysis
 0 1 2 3 4 5
Initial investment CF #NAME?
Selling of old
Tax Effect
Production
Goods
Working Capital -30000 10000 -5000 25000 0

II Marginal CF
Change in annual sales #NAME? #NAME? #NAME? #NAME?
Change in annual expences #NAME? #NAME? #NAME? #NAME?

Change in depreciation #NAME? #NAME? #NAME? #NAME?

Change in EBT #NAME? #NAME? #NAME? #NAME?
Change in Tax 25% #NAME? #NAME? #NAME? #NAME?
Change in NI #NAME? #NAME? #NAME? #NAME?
AddBack Depreciation #NAME? #NAME? #NAME? #NAME?
Total Marginal CF #NAME? #NAME? #NAME? #NAME? #NAME? #NAME?
10000 -5000 25000 0
III Terminal CF
Sales
Tax
Return of NWC
Opportunity cost of selling old
Opp Cost of Tax
Total Cash Flows #NAME? #NAME? #NAME? #NAME? #NAME? #NAME?
PV of Cash Flows #NAME? #NAME? #NAME? #NAME? #NAME? #NAME?

IRR #NAME?