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For a new process, the land was purchased for $5 million. The fixed capital investment, paid at the end of year 0, is $100 million.
For a new process, the land was purchased for $5 million. The fixed capital investment, paid at the end of year 0, is $100 million. The working capital is $10 million, and no salvage value. What is the revenue required to obtain a 15% return on investment after 10 years using after tax cash flows if the cost of manufacturing is $25 million/y. Assume the taxation rate is 21%.
Please show a spreadsheet that shows: (with equation and explanation)
- Revenue, which you are trying to determine. Assume the revenue is constant each year (years 1-10).
- Depreciation of capital assets using the five-year MACRS method.
- Taxable income, tax, and after tax cash flow for each year (years 1-10).
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