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( 1 ) This project costs $ 1 , 8 0 0 , 0 0 0 to purchase fixed assets, and $ 5 0 ,
This project costs $ to purchase fixed assets, and $ for shipping & installation fee.
The life of this project is years. The salvage value of fixed assets is of the gross fixed assets including shipping & installation fee
The working capital needed is $ in and it is expected to increase each year thereafter.
This project can produce units in and production is expected to grow each year. The current unit price is $ and the cost of each unit is $
The inflation rate is each year. The firm will adjust both the unit price and the variable cost of each unit based on the inflation rate.
The firm uses the year straightline depreciation policy for its fixed assets, and it is in the tax bracket.
The cost of capital for the firm is
A Calculate the initial outlay, annual aftertax cash flows, and terminal cash flow for this project.
B Calculate the payback period, discounted payback period, NPV PI IRR, and MIRR.
C Perform sensitivity analysis of the effects of cost of capital on the projects NPV
D Scenario analysis of the combined effects of the following three variables on payback, discounted payback, NPV IRR, and MIRR.
Scenario Production Unit Price Unit Cost
Best Case $ $
Expected Case $ $
Worst Case $ $
Please post answers with Excel formulas in below format
Unit Production
Unit Price
Unit cost
Sales
Variable costs
Depreciation Expense
EBIT
Tax
NOPAT EBIT Tax
Depreciation
Fixed Assets
Shipping & Installation fee
Gross Fixed Assets Expenditure
Net Working Capital
Changes in Net Working Capital
Salvage Value
Annual aftertax Cash Flows
Payback Period
PV of Expected FCF
Discounted Payback
NPV
IRR
MIRR
Years of straightline depreciation
Salvage Value of purchasing costs
Working Capital Growth rate
Corporate Tax Rate
Cost of Capital
Production Growth Rate
Inflation rate
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