0 | 1 | 2 | 3 | |
Sales in units | 1200 | 1125 | 1000 | |
Sales revenue [$490/Unit] | $ 5,88,000 | $ 5,51,250 | $ 4,90,000 | |
-Variable costs [$270/Unit] | $ 3,24,000 | $ 3,03,750 | $ 2,70,000 | |
-Fixed costs | $ 1,00,000 | $ 1,00,000 | $ 1,00,000 | |
-Depreciation [138000/3] | $ 46,000 | $ 46,000 | $ 46,000 | |
=NOI | $ 1,18,000 | $ 1,01,500 | $ 74,000 | |
-Tax at 35% | $ 41,300 | $ 35,525 | $ 25,900 | |
=NOPAT | $ 76,700 | $ 65,975 | $ 48,100 | |
+Depreciation | $ 46,000 | $ 46,000 | $ 46,000 | |
=Operating cash flow | $ 1,22,700 | $ 1,11,975 | $ 94,100 | |
-Capital expenditure | $ 1,38,000 | |||
-Change in NWC | $ 1,76,400 | $ -11,025 | $ -18,375 | $ -1,47,000 |
+After tax salvage value = 26000*(1-35%) = | $ 16,900 | |||
=FCF | $ -3,14,400 | $ 1,33,725 | $ 1,30,350 | $ 2,58,000 |
PVIF at 11% [PVIF = 1/1.11^t] | 1 | 0.90090 | 0.81162 | 0.73119 |
PV | $ -3,14,400 | $ 1,20,473 | $ 1,05,795 | $ 1,88,647 |
NPV | $ 1,00,515 | |||
ANSWER: | ||||
OCF IN YEAR 2 = | $ 1,11,975 |
You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice....
You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $440 per unit and sales volume to be 1,000 units in year 1; 1,500 units in year 2; and 1,325 units in year 3. The project has a 3-year life. Variable costs amount to $245 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $177,000 in assets,...
You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $430 per unit and sales volume to be 1,200 units in year 1; 1,325 units in year 2; and 1,000 units in year 3. The project has a 3-year life. Variable costs amount to $240 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $156,000 in assets,...
You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $430 per unit and sales volume to be 1,000 units in year 1; 1,500 units in year 2; and 1,325 units in year 3. The project has a 3-year life. Variable costs amount to $240 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $174,000 in assets,...
You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff-any to be $440 per unit and sales volume to be 1,200 units in year 1; 1,325 units in year 2; and 1,000 units in year 3. The project has a 3-year life. Variable costs amount to $245 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $153,000 in assets,...
You are evaluating a project for The Tiff-any golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Tiff- any to be $410 per unit and sales volume to be 1,000 units in year 1; 1,500 units in year 2; and 1,325 units in year 3. The project has a 3- year life. Variable costs amount to $230 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $168,000...
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You are evaluating a project for The Farstroke golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Farstroke to be $440 per unit and sales volume to be 1,200 units in year 1; 1,325 units in year 2; and 1,000 units in year 3. The project has a 3-year life. Variable costs amount to $245 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $153,000 in assets,...
You are evaluating a project for The Farstroke golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Farstroke to be $450 per unit and sales volume to be 1,200 units in year 1; 1,325 units in year 2; and 1,000 units in year 3. The project has a 3-year life. Variable costs amount to $250 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $150,000 in assets,...
You are evaluating a project for The Farstroke golf club, guaranteed to correct that nasty slice. You estimate the sales price of The Farstroke to be $440 per unit and sales volume to be 1,000 units in year 1; 1,500 units in year 2; and 1,325 units in year 3. The project has a 3-year life. Variable costs amount to $245 per unit and fixed costs are $100,000 per year. The project requires an initial investment of $177,000 in assets,...