Scribd
Upload
214 views6 pages

Tuckerhessa 10

This document contains the inputs and calculations for a capital budgeting analysis of an asset costing $100,000 with installation costs of $40,000 and an economic life of 6 years. It shows revenues growing at 5% annually, fixed costs of $25,000, and a tax rate of 40%. It calculates net present value, internal rate of return, profitability index, depreciation amounts, cash flows, and tax consequences each year of the project through disposition. The net present value is $1,540.14, internal rate of return is 9.81%, and profitability index is 1.01, indicating the project should be accepted.

Uploaded by

api-282913945
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
214 views6 pages

Tuckerhessa 10

This document contains the inputs and calculations for a capital budgeting analysis of an asset costing $100,000 with installation costs of $40,000 and an economic life of 6 years. It shows revenues growing at 5% annually, fixed costs of $25,000, and a tax rate of 40%. It calculates net present value, internal rate of return, profitability index, depreciation amounts, cash flows, and tax consequences each year of the project through disposition. The net present value is $1,540.14, internal rate of return is 9.81%, and profitability index is 1.01, indicating the project should be accepted.

Uploaded by

api-282913945
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
You are on page 1/ 6

Capital Budgeting Assignment #10 Tucker Hess

cost of asset
installation/testing
MACRS
economic life
sales
sales growth rate
fixed cost
COGS
change in NWC
selling price
TAX RATE
WACC

100,000.00
40,000.00
5
6
200,000.00
5% until 6th year
25,000.00
75%
10,000.00
60,000.00
40%
9.50%

year
1
2
3
4
5
6

depr
28,000.00
44,800.00
26,880.00
16,100.00
16,100.00
8,120.00

Year
Revenues
COGS
Fixed Cost
EBITDA
Less Depr
EBIT
Less Taxes
NI
add back depr
OCF
Asset
Change in NWC
cash from asset
^^ #2 ^^
NPV
IRR
PI

(140,000.00)
(10,000.00)
(150,000.00)
initial cost
$

1,540.14
9.81%
1.01

1
200,000.00
150,000.00
25,000.00
25,000.00
28,000.00
(3,000.00)
(1,200.00)
(1,800.00)
28,000.00
26,200.00

2
210,000.00
157,500.00
25,000.00
27,500.00
44,800.00
(17,300.00)
(6,920.00)
(10,380.00)
44,800.00
34,420.00

26,200.00

34,420.00

#5

depr base
acc depr
book value
selling price

140,000.00
131,880.00
8,120.00
60,000.00

8,120.00

gain/(loss)
tax conseq

51,880.00
20,752.00 tax liab

ATS

39,248.00 #4

sp-t*(sp-(depr base-acc depr))

selling price or MV
book value
gain/loss
tax conseq
ATS

39,248.00

BONUS
5,000.00
24,220.00
(19,220.00)
(7,688.00) tax savings
12,688.00

24,220.00
24,220.00

#BONUS

3
220,500.00
165,375.00
25,000.00
30,125.00
26,880.00
3,245.00
1,298.00
1,947.00
26,880.00
28,827.00

4
231,525.00
173,643.75
25,000.00
32,881.25
16,100.00
16,781.25
6,712.50
10,068.75
16,100.00
26,168.75

5
243,101.25
182,325.94
25,000.00
35,775.31
16,100.00
19,675.31
7,870.13
11,805.19
16,100.00
27,905.19

28,827.00

26,168.75

27,905.19

3-year
0.333
0.445
0.148
0.074

5-year
0.2
0.32
0.192
0.115
0.115
0.058

Year
1
2
3
4
5
6

#3

6
243,101.25
182,325.94
25,000.00
35,775.31
131,880.00
35,775.31
14,310.13
21,465.19
21,465.19 #1
39,248.00 ats
10,000.00 nwc
70,713.19

7-year
0.143
0.245
0.175
0.125
0.089
0.089

10-year
0.1
0.18
0.144
0.115
0.092
0.074

7
8
9
10

0.089
0.045

0.066
0.066
0.065
0.065

TCF(6)

49,248.00

You might also like