5555
Classified in Mathematics
Written at on 
English with a size of 3.51 KB.
1) OCF = (S – C)(1 – t) + Tc Depreciation
OCF = [($5 × 1,900) – ($2.20 × 1,900)](1 – 0.34) + 0.34($12,000/5)
OCF = $4,327.20
NPV = –$12,000 + $4,327.20(PVIFA14%,5) = $2,855.63
Y 1 | Y 2 | Y 3 | Y 4 | ||
8,500 | 9,000 | 9,500 | 7000 | ||
Cost | 1,900 | 2,000 | 2,200 | 1,700 | |
Dep. | 4,000 | 4,000 | 4,000 | 4,000 | |
EBT | 2,600 | 3,000 | 3,300 | 1,300 | |
Tax | 884 | 1,020 | 1,122 | 442 | |
Net Income | 1,716 | 1,980 | 2,178 | 858 | |
Ocf | 5,716 | 5,980 | 6,178 | 4,858 | |
Cpital spending | -16,000 | ||||
Nwc | -200 | -200 | -300 | -250 | 950 |
Cash flow | -16,200 | 5,466 | 5,680 | 5,978 | 5,808 |
NPV = –$16,200 + $5,466 / 1.12 + $5,680 / 1.122 + $5,978 / 1.123 + $5,808 / 1.124 = $1,154.53
3)OCF = ($2,050,000 – 950,000)(1 – 0.35) + 0.35($2,400,000/3) = $995,000
NPV = –$2,400,000 + $995,000(PVIFA12%,3) = –10,177.89
Year | cash flow |
0 | – $2,685,000 = –$2,400,000 – 285,000 |
1 | 995,000 |
2 | 995,000 |
3 | ,426,250 = $995,000 + 285,000 + 225,000 + (0 – 225,000)(.35) |
NPV = –$2,685,000 + $995,000(PVIFA12%,2) + ($1,426,250 / 1.123 ) = $11,777.34