Input
Life 8 years Year
Capital outlay 1000000 $ million 0
Upgrade (Y3) 500,000 $ million 1
Salvage value 16,000 $ 2
Depreciation rate (for initial investment) 12.50% per annum 3
Depreciation (for upgrade, Y4 - Y8) 100000 $/year 4
Extra sales units (Y4 - Y8) 500,000 units/year 5
Selling price (for five first years) 0.50 $/unit 6
Selling price (thereafter) 0.75 $/unit 7
Production cost 0.10 $/unit 8
Operating costs (five first years) 50,000 $/year
Operating costs (thereafter) 55,000 $/year Tax rate
Output
Depreciation (for initial investment - 8 years) $125,000 $/year
Depreciation (for upgrade - 5 years) 100,000 $/year
Total depreciation 225,000 $
Year 0 1 2 3 4
Capital outlay (1,000,000)
Upgrade (500,000)
After-tax salvage
NWC cash flows (2,000) (500) (600) (500) (400)
Capital CFs (1,002,000) (500) (600) (500,500) (400)
Forecasted sales units 691,106 707,812 724,518 741,224
Extra sales units 500,000
Total sales units 691,106 707,812 724,518 1,241,224
Unit selling price 0.50 0.50 0.50 0.50
Sales income 345,553 353,906 362,259 620,612
Production unit cost 0.1 0.10 0.10 0.10
Production cost 69111 70781 72452 124122
Other operating costs 50,000 50,000 50,000 50,000
Depreciation initial 125,000 125,000 125,000 125,000
Depreciation upgrade 100,000
Total costs 119,111 120,781 122,452 174,122
Before-tax income 101,442 108,125 114,807 221,490
Taxe payable 30,433 32,437 34,442 66,447
Net income (after tax) 71,010 75,687 80,365 155,043
Net Operating CFs 196,010 200,687 205,365 380,043
Total Net CFs (1,002,000) 195,510 200,087 (295,135) #NAME?
NWC ($) NWC cash flow Year Sales (units)
(2,000) 1990 500,000
2,000 (500) 1991 550,000
2,500 (600) 1992 540,000
3,100 (500) 1993 560,000
3,600 (400) 1994 565,000
4,000 (300) 1995 590,000
4,300 (200) 1996 600,000
4,500 1,500 1997 610,000
3,000 3,000 1998 615,559
1999 669,000
30% 2000 700,000
Remaining value of fixed assets 0$
Taxes on sale assets 4,800 $
After-tax salvage 11,200 $
5 6 7 8
11,200
(300) (200) 1,500 3,000
(300) (200) 1,500 14,200
757,931 774,637 791,343 808,049
500,000 500,000 500,000 500,000
1,257,931 1,274,637 1,291,343 1,308,049
0.50 0.75 0.75 0.75
628,965 955,978 968,507 981,037
0.10 0.10 0.10 0.10
125793 127464 129134 130805
50,000 55,000 55,000 55,000
125,000 125,000 125,000 125,000
100,000 100,000 100,000 100,000
175,793 182,464 184,134 185,805
228,172 548,514 559,373 570,232
68,452 164,554 167,812 171,070
159,721 383,960 391,561 399,162
384,721 608,960 616,561 624,162
384,421 608,760 618,061 638,362
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.96146206
R Square 0.92440929
Adjusted R S 0.91601032
Standard Erro 16701.4296
Observations 11
ANOVA
df SS MS F Significance F
Regression 1 3.0701E+10 3.0701E+10 110.062249 2.39759E-06
Residual 9 2510439743 278937749
Total 10 3.3211E+10
CoefficientsStandard Error t Stat P-value Lower 95% Upper 95% Lower 95,0%
Intercept 490632.073 10800.31 45.4275919 6.07102E-12 466200.074 515064.071 466200.074
X Variable 1 16706.1545 1592.41883 10.4910557 2.39759E-06 13103.8529 20308.4562 13103.8529
674399.773
Upper 95,0%
515064.071
20308.4562
Year Year = X Sales = Y Year X Y
1990 1 500,000 2001 12
1991 2 550,000 2002 13
1992 3 540,000 2003 14
1993 4 560,000 2004 15
1994 5 565,000 2005 16
1995 6 590,000 2006 17
1996 7 600,000 2007 18
1997 8 610,000 2008 19
1998 9 615,559
1999 10 669,000 Y = …………. + …………….. * X
2000 11 700,000
