I'm pretty sure about all input areas needing a value in them and I corrected some of the mistakes from the previous tutor's answer but I'm still getting some of the numbers incorrect. Can someone help me with the remaining incorrect inputs?
cashflow in year | ||||||||
item | description | pv | 0 | 1 | 2 | 3 | 4 | 5 |
a | after tax monthly rent foregone | $ 1,82,231 | $ 47,328 | $ 47,328 | $ 47,328 | $ 47,328 | $ 47,328 | |
b | all are relevant | |||||||
c | remodelling cost | $ -1,90,000 | $ -1,90,000 | |||||
depreciation tax saving | $ 63,494 | $ 31,920 | $ 19,512 | $ 11,491 | $ 8,618 | $ 8,618 | ||
d | investment in net working capital | $ -7,35,000 | $ -7,35,000 | |||||
e | recoveryy of net working capital | $ 4,35,855 | $ 7,34,416 | |||||
f | after tax cash sales | $ 21,22,243 | $ 5,74,200 | $ 5,74,200 | $ 5,74,200 | $ 5,74,200 | $ 5,74,200 | |
after tax cash operating expenses | $ -12,64,771 | $ 3,42,200 | $ 3,42,200 | $ 3,42,200 | $ 3,42,200 | $ 3,42,200 | ||
g | after tax sales promotion cost | $ -73,660 | $ -73,660 | |||||
h | after tax termination cost | $ -23,388 | $ 39,409 | |||||
npv | $ 5,17,004 |
notes
pv on rent foregone is to be calculated on monthly basis
monthly rent after tax = $6800 x 58% = $3944
monthly rate = 11%/12 = .9% approx
pv = $3944 x PVAF(.9%,60)
= $3944 x 46.2047
= $182,231
PV of depreciation tax saving = $31920 x 1.11-1 + $19152 x 1.11-2 + $11491 x 1.11-3 + $8618 x 1.11-4 + $8618 x1.11-5
= $63,494
I'm pretty sure about all input areas needing a value in them and I corrected some...
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