5 Capital Budgeting Case x + V - X 0 file:///C:/Users/syiny/Desktop/Capital%20Budgeting%20Case%20PROBLEM%20FALLyea%202019.pdf then , and drag to the Favorites Bar folder. Or import from another browser. Import favorites To see favorites here, select 1 of 4 lo - + Q Fit to page [Q Page view | A Read aloud L Add notes H E s Behzad Pouyanfar Capital Budgeting Decisions CASE STUDY FINC 3310 - FALL 2019 Learning Objectives 1. Understand how to use EXCEL Spreadsheet (a) Develop proforma Income Statement Using Excel Spreadsheet (b) Compute Net Project Cashflows, NPV, and IRR (c) Develop problem-solving and critical thinking skills and make long-term investment decisions 1) Life Period of the Equipment = 4 years 2) New equipment cost 3) Equipment ship & install cost 4) Related start up cost 5) Inventory increase 6) Accounts Payable increase 7) Equip. salvage value before tax ($200,000) ($35,000) ($5,000) $25,000 $5,000 $15,000 8) Sales for first year (1) 9) Sales increase per year 10) Operating cost (60% o (as a percent of sales in 11) Depreciation 12) Marginal Corporate Ta 13) Cost of Capital (Disco Filling data in the cells colored only. ESTIMATING Initial Outlay (Cash Flow, CFO, T=0) CFO CF1 Year a Capital Budgeting Case x + v - X 0 0 file:///C:/Users/syiny/Desktop/Capital%20Budgeting%20Case%20PROBLEM%20FALLyea%202019.pdf To see favorites here, select then , and drag to the Favorites Bar folder. Or import from another browser. Import favorites - + | 1 of 4 lo Fit to page I Page view | A Read aloud L Add notes sa Year Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay Operations: Revenue Operating Cost Depreciation EBIT Taxes Net Income | 15 (15) A A A A (5) (10) Add back Depreciation 15 A Behzad Pouyanfar Total Operating Cash Flow $ 5 Terminal values: 1) Change in net WC 2) Salvage value (after tax) Total | Project Net Cash Flows $ $ a Capital Budgeting Case x + v - X 0 0 file:///C:/Users/syiny/Desktop/Capital%20Budgeting%20Case%20PROBLEM%20FALLyea%202019.pdf To see favorites here, select then , and drag to the Favorites Bar folder. Or import from another browser. Import favorites - + | 1 of 4 lo Fit to page I Page view | A Read aloud L Add notes sa Year Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay Operations: Revenue Operating Cost Depreciation EBIT Taxes Net Income | 15 (15) A A A A (5) (10) Add back Depreciation 15 A Behzad Pouyanfar Total Operating Cash Flow $ 5 Terminal values: 1) Change in net WC 2) Salvage value (after tax) Total | Project Net Cash Flows $ $ a Capital Budgeting Case x + v - X 0 0 file:///C:/Users/syiny/Desktop/Capital%20Budgeting%20Case%20PROBLEM%20FALLyea%202019.pdf To see favorites here, select then , and drag to the Favorites Bar folder. Or import from another browser. Import favorites - + | 1 of 4 lo Fit to page I Page view | A Read aloud L Add notes sa Year Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay Operations: Revenue Operating Cost Depreciation EBIT Taxes Net Income | 15 (15) A A A A (5) (10) Add back Depreciation 15 A Behzad Pouyanfar Total Operating Cash Flow $ 5 Terminal values: 1) Change in net WC 2) Salvage value (after tax) Total | Project Net Cash Flows $ $ a Capital Budgeting Case x + v - X 0 0 file:///C:/Users/syiny/Desktop/Capital%20Budgeting%20Case%20PROBLEM%20FALLyea%202019.pdf To see favorites here, select then , and drag to the Favorites Bar folder. Or import from another browser. Import favorites - + | 1 of 4 lo Fit to page I Page view | A Read aloud L Add notes sa Year Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay Operations: Revenue Operating Cost Depreciation EBIT Taxes Net Income | 15 (15) A A A A (5) (10) Add back Depreciation 15 A Behzad Pouyanfar Total Operating Cash Flow $ 5 Terminal values: 1) Change in net WC 2) Salvage value (after tax) Total | Project Net Cash Flows $ $ 5 Capital Budgeting Case x + V - X 0 file:///C:/Users/syiny/Desktop/Capital%20Budgeting%20Case%20PROBLEM%20FALLyea%202019.pdf then , and drag to the Favorites Bar folder. Or import from another browser. Import favorites To see favorites here, select 1 of 4 lo - + Q Fit to page [Q Page view | A Read aloud L Add notes H E s Behzad Pouyanfar Capital Budgeting Decisions CASE STUDY FINC 3310 - FALL 2019 Learning Objectives 1. Understand how to use EXCEL Spreadsheet (a) Develop proforma Income Statement Using Excel Spreadsheet (b) Compute Net Project Cashflows, NPV, and IRR (c) Develop problem-solving and critical thinking skills and make long-term investment decisions 1) Life Period of the Equipment = 4 years 2) New equipment cost 3) Equipment ship & install cost 4) Related start up cost 5) Inventory increase 6) Accounts Payable increase 7) Equip. salvage value before tax ($200,000) ($35,000) ($5,000) $25,000 $5,000 $15,000 8) Sales for first year (1) 9) Sales increase per year 10) Operating cost (60% o (as a percent of sales in 11) Depreciation 12) Marginal Corporate Ta 13) Cost of Capital (Disco Filling data in the cells colored only. ESTIMATING Initial Outlay (Cash Flow, CFO, T=0) CFO CF1 Year a Capital Budgeting Case x + v - X 0 0 file:///C:/Users/syiny/Desktop/Capital%20Budgeting%20Case%20PROBLEM%20FALLyea%202019.pdf To see favorites here, select then , and drag to the Favorites Bar folder. Or import from another browser. Import favorites - + | 1 of 4 lo Fit to page I Page view | A Read aloud L Add notes sa Year Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay Operations: Revenue Operating Cost Depreciation EBIT Taxes Net Income | 15 (15) A A A A (5) (10) Add back Depreciation 15 A Behzad Pouyanfar Total Operating Cash Flow $ 5 Terminal values: 1) Change in net WC 2) Salvage value (after tax) Total | Project Net Cash Flows $ $ a Capital Budgeting Case x + v - X 0 0 file:///C:/Users/syiny/Desktop/Capital%20Budgeting%20Case%20PROBLEM%20FALLyea%202019.pdf To see favorites here, select then , and drag to the Favorites Bar folder. Or import from another browser. Import favorites - + | 1 of 4 lo Fit to page I Page view | A Read aloud L Add notes sa Year Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay Operations: Revenue Operating Cost Depreciation EBIT Taxes Net Income | 15 (15) A A A A (5) (10) Add back Depreciation 15 A Behzad Pouyanfar Total Operating Cash Flow $ 5 Terminal values: 1) Change in net WC 2) Salvage value (after tax) Total | Project Net Cash Flows $ $ a Capital Budgeting Case x + v - X 0 0 file:///C:/Users/syiny/Desktop/Capital%20Budgeting%20Case%20PROBLEM%20FALLyea%202019.pdf To see favorites here, select then , and drag to the Favorites Bar folder. Or import from another browser. Import favorites - + | 1 of 4 lo Fit to page I Page view | A Read aloud L Add notes sa Year Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay Operations: Revenue Operating Cost Depreciation EBIT Taxes Net Income | 15 (15) A A A A (5) (10) Add back Depreciation 15 A Behzad Pouyanfar Total Operating Cash Flow $ 5 Terminal values: 1) Change in net WC 2) Salvage value (after tax) Total | Project Net Cash Flows $ $ a Capital Budgeting Case x + v - X 0 0 file:///C:/Users/syiny/Desktop/Capital%20Budgeting%20Case%20PROBLEM%20FALLyea%202019.pdf To see favorites here, select then , and drag to the Favorites Bar folder. Or import from another browser. Import favorites - + | 1 of 4 lo Fit to page I Page view | A Read aloud L Add notes sa Year Investments: 1) Equipment cost 2) Shipping and Install cost 3) Start up expenses Total Basis Cost (1+2+3) 4) Net Working Capital Total Initial Outlay Operations: Revenue Operating Cost Depreciation EBIT Taxes Net Income | 15 (15) A A A A (5) (10) Add back Depreciation 15 A Behzad Pouyanfar Total Operating Cash Flow $ 5 Terminal values: 1) Change in net WC 2) Salvage value (after tax) Total | Project Net Cash Flows $ $