Question
For this week's assignment, use the spreadsheet you created in Module 3 and updated in Module 6. Update the spreadsheet by adding the financing component
For this week's assignment, use the spreadsheet you created in Module 3 and updated in Module 6. Update the spreadsheet by adding the financing component (calculation of WACC) for the model. In other words, instead of the model simply having an input that is the value of "r," users should input information about the capital structure of the firm, the cost of debt, the cost of equity for the firm, the weight of each, and WACC should be calculated and used in the calculations of the model. For your submission, the only additional data that will be needed to add to your model is:
Cost of Equity | 13% |
Cost of Debt | 8.5% |
Weight of Equity | 50% |
Weight of Debt | 50% |
Below is module 6 data:
The inputs for your submission are:Initial Cost | $100,000 |
Annual Revenues | $81,155 |
Annual Costs (Excluding Depreciation) | $20,000 |
Year 3 Overhaul | $15,390 |
Year 6 Clean-up Costs | $17,690 |
Equipment Salvage/Book Value | $10,000 |
Useful Life | 6 years |
r (this was not provided in 2.3) | 0.10 |
Tax Rate | 0.35 |
Equipment Sold For | $20,000 |
Year Capital Costs 0 1 2 3 4 5 6 O&M Overhaul -80000 -12000 -12000 -12000 -12000 -12000 -25000 10000 Chart Title 20000 0 1 2 3 -20000 -40000 -60000 -80000 -100000 Year Capital Costs O& Chart Title 2 Year 3 4 Capital Costs O&M 5 Overhaul 6 7 Year Capital Costs 0 1 2 3 4 5 6 7 8 9 10 O&M Overhaul -100000 10000 -30000 -30000 -30000 -30000 -30000 -30000 -10000 Chart 20000 0 1 2 3 -20000 -40000 -60000 -80000 -100000 -120000 Year Capital Cost Chart Title 2 Year 3 Capital Costs 4 O&M 5 Overhaul 6 7
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