Question
Calculate NPV, IRR and Payback based on the information given in the problem except for the specific numbers below Manufacturing Equipment Cost 1,220,000 Sales Revenue
Calculate NPV, IRR and Payback based on the information given in the problem except for the specific numbers below
Manufacturing Equipment Cost 1,220,000 Sales Revenue increase by 2% per year
Capital Budgeting for Project X Based on the following information for project X, should we undertake the venture? To answer, first prepare a pro forma income statement for each year. Next calculate operating cash flow. Finish the problem by determining total cash flow and then calculating NPV assuming a 28 percent required return. Use a 34 percent tax rate throughout. For help, look back at our shark attractant and power mulcher examples. Project X involves a new type of graphite composite in-line skate wheel. We think we can sell 6,000 units per year at a price of $1,000 each. Variable costs will run about $400 per unit, and the product should have a four-year life. Fixed costs for the project will run $450,000 per year. Further, we will need to invest a total of $1,250,000 in manufacturing equipment. This equipment is seven-year MACRS property for tax purposes. In four years, the equipment will be worth about half of what we paid for it. We will have to invest $1,150,000 in net working capital at the start. After that, net working capital requirements will be 25 percent of sales.
I'm supposed to put it in this Excel chart.
Home Insert Page Layout Formulas Data Review View Tell me what you want to do 1+(ABS(B17)-C17)/D17 B21 Cash Flows 14 Operating Cash Flow 2132444.6 2194352.6 2239743 2231680.576 1150000 15 Changes in NWC -350000 15000 15150 1545451.5 16 Net Capital Spen 545270 13100000 17 Cash Flow From 2,460,000 1,782,445 2.179.353 2.224.593 4,322,402 19 Net Present Valu $3,910,682 20 RR 79.86% 1.31 (ABS (B17) C17)/D17 21 Payback Period 23 Working Capital 1150000 1500000 1515000 1530150 1545451.5 1150000 15000 15301.5 24 Change in NWC 350000 15150 25 27 28 33 35 Sheet 2 Sheet3 Sheet Type here to search A A share 522 PM 4/29/2017Step by Step Solution
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