1 Capital Budgeting Analysis of Hola-Kola 2 Cost of new equipment 3 Resale value of equipment 4 Monthly sales (units) 5 Unit sale price 6 Unit raw material cost 7 Monthly labor costs 8 monthly energy costs 9 % overhead to sales 10 GAS 11 Building rental 12 Average collection period (Days) 13 Average payment period (Days) 14 Years of straight line depreciation 15 Cost of capital 16 Tax rate 17 Erosion 18 19 Year 20 Cost of new equipment 21 Resale value of equipment 22 Less taxes 23 After-tax resale value 50,000,000 pesos 4,000,000 pesos 600,000 units 5 pesos 1.8 pesos 180,000 pesos 50,000 pesos 1% 300,000 year 60,000 pesos 45 days 36 days 5 years 18.20% 30% 800,000 pesos 1 2 3 4 5 0 50,000,000 4,000,000 24 25 Annual sales (units) 26 Annual sales revenue 27 28 Operating expenses 29 Total Raw material costs 30 Total Direct labor costs 31 Total Energy costs 32 Building rental (opportunity costs) 33 Depreciation 34 GAS 35 Overhead expenses 36 Operating income 37 Operating income after tax 38 39 Project's OCF 40 Add back depreciation 41 Erosion of existing sales 42 Total OCH 43 45 Working capital requirements 46 Receivables ((Sales/365)"avg collection periochem 47 Inventories (One month material costs) 48 Payables (Material costs/365)*avg pmt period) 49 50 Investment in NWC 51 Total cash flows 52 53 NPV 54 IRR