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    Chapter 9

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    thinkestan
    The document contains calculations related to financial statements, cash flows, costs, revenues, depreciation, taxes and other metrics for various firms and projects over multiple time periods. It analyzes figures like profits, costs of goods sold, depreciation expenses, tax rates, changes in working capital, capital expenditures, revenues, and resulting cash flows. The goal appears to be to calculate net present values and assess the profitability and cash flow impacts of different investment and capital budgeting scenarios.

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    Chapter 9

    Uploaded by

    thinkestan
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    The document contains calculations related to financial statements, cash flows, costs, revenues, depreciation, taxes and other metrics for various firms and projects over multiple time periods. It analyzes figures like profits, costs of goods sold, depreciation expenses, tax rates, changes in working capital, capital expenditures, revenues, and resulting cash flows. The goal appears to be to calculate net present values and assess the profitability and cash flow impacts of different investment and capital budgeting scenarios.

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    The document contains calculations related to financial statements, cash flows, costs, revenues, depreciation, taxes and other metrics for various firms and projects over multiple time periods. It analyzes figures like profits, costs of goods sold, depreciation expenses, tax rates, changes in working capital, capital expenditures, revenues, and resulting cash flows. The goal appears to be to calculate net present values and assess the profitability and cash flow impacts of different investment and capital budgeting scenarios.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    4 views4 pages

    Chapter 9

    Uploaded by

    thinkestan
    The document contains calculations related to financial statements, cash flows, costs, revenues, depreciation, taxes and other metrics for various firms and projects over multiple time periods. It analyzes figures like profits, costs of goods sold, depreciation expenses, tax rates, changes in working capital, capital expenditures, revenues, and resulting cash flows. The goal appears to be to calculate net present values and assess the profitability and cash flow impacts of different investment and capital budgeting scenarios.

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    © All Rights Reserved
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    Download as xlsx, pdf, or txt
    of 4

    QS

    7 Depreciation 450000
    Tax rate 40%
    Tax shield 180000

    8 PAT 2800000
    Depn 500000
    Change in WC -410000

    FCF 3710000

    9 FCF For Firm


    Sales 2300000
    COGS 980000
    Depn 600000
    Taxes 216000

    PAT 504000
    + Depn 600000
    FCF 1104000
    10
    Cost of Machine 8
    Transportation cost 0.07
    Total cost of machine 8.07
    Depn per year 1.00875

    Incremental revenue 5
    Incremental costs 2.3
    Depn 1.00875
    Tax rate 40%
    Incremental earnings 1.01475

    Incremental earnings 1.01475


    + Depn 1.00875
    Incremental Cashflow 2.0235

    11 1 2 3 4 5
    Cash 6 12 15 15 15
    AR 21 22 24 24 24
    Inventory 5 7 10 12 13
    AP 18 22 24 25 30

    Net Working Capital 14 19 25 26 22


    Changes in NWC 14 5 6 1 -4

    13 1 2
    Revenue 125 160
    Opex 40 60
    Depn 25 36
    Tax rate 35% 35%
    Incremental earnings 39 42

    Incremental earnings 39 42
    Increase in Working C 2 8
    Capex 30 40
    Depn 25 36
    FCF 32 30

    14
    Net Income 250
    Depn 100
    Capex 200
    Change in NWC 10
    FCF 140

    16 0 1 2 3 4 5 6
    Gross profit of new machine 40000 40000 40000 40000 40000 40000
    Gross profit of old machine (opportun 20000 20000 20000 20000 20000 20000
    Final Gross Profit 20000 20000 20000 20000 20000 20000
    Depreciation 5000 5000 5000 5000 5000 5000
    EBIT 15000 15000 15000 15000 15000 15000
    Tax rate 45% 45% 45% 45% 45% 45%
    EBIT (1-t) 8250 8250 8250 8250 8250 8250

    EBIT (1-t) 8250 8250 8250 8250 8250 8250


    Depn 5000 5000 5000 5000 5000 5000
    Cost of new machine -150000
    Proceeds from old ma 50000

    Tax shield benefit


    from sale of
    machine (Market
    Rate - Book
    Value)*Tax Rate) 22500

    FCF -77500 13250 13250 13250 13250 13250 13250

    NPV ₹ 3,915.51 ₹ 81,415.51


    -77500

    18 Ignore sunk cost


    Capex of outfitting -30000
    NWC -5000
    Opportunity cost -115000

    FCF -150000
    19 Cost of machine 1
    Den per year 0.1428571429
    Depn for three years 0.4285714286
    BV today 0.5714285714
    Machine sold today 0.7
    Tax impact as machine 0.045
    Incremental cash flo 0.655
    7 8 9 10
    40000 40000 40000 40000
    20000 20000 20000 20000
    20000 20000 20000 20000
    5000 5000 5000 5000
    15000 15000 15000 15000
    45% 45% 45% 45%
    8250 8250 8250 8250

    8250 8250 8250 8250


    5000 5000 5000 5000

    13250 13250 13250 13250

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