Hi,

Looking for someone to check my work:

NPV1 w/ 7.07% discount rate

NPV2 w/ 10% discount rate

IRR

PRO FORMA I/S DATA & CALCULATIONS 0 1 2 3 4 5 6 2016 2017 2018 2019 2020 2021 2022 DEP CALC> Initial Investment (GIVEN) $ 16,000,000 $ 2,000,000 Useful Life Depreciation 3,000,000 Salvage Value (Before Taxes) 1,800,000 REV >|Annual revenues 4,000,000 $ 10,000,000 $ 10,000,000 $ 10.000,000 $ 10,000,000 $ 10,000,000 Projected (FromPro Forma Statements) COGS 3,000,000 7,500,000 7,500,000 7,500,000 7,500,000 7,500,000 75% of revenue Operating Savings (Input as neg. cost) (2,000,000) (3,500,000) $ (3,500,000) (3,500,000) $ (3,500,000) $ (3,500,000) SG&A Costs 200,000 500,000 500,000 500,000 500,000 $ 500,000 5% of revenue DEP 3,000,000 3,000.000 3,000.000 3.000,000 3,000,000 $ 3,000.000 COSTS > Total Costs (SG&A, Op. Sav. DEP) 4,200,000 7,500,000 $ 7,500,000 $ 7,500,000 7,500,000 $ 7,500,000 EARNINGS & NI > EBIT (200,000) $ 2,500,000 2,500,000 2,500,000 $ 2,500,000 2,500,000 TAXES (80,000) 1,000,000 1,000,000 1,000,000 $ 1,000,000 1,000,000 NI (120,000) $ 1,500,000 $ 1,500,000 1,500,000 1,500,000 $ 1,500,000 WC COST>|increase in working capital (400,000) $ (600,000) $ $ $ 1,000,000 Full WC recovery CFFA TABLE WWP (USING DATA FROM ABOVE) CALC. from ABOVE> OCF 2,880,000 S .500,000 S 4.500.000 $ 4,500.000 $ 4,500,000 $ 4.500,000 Need to Determine this Value from above GIVEN NCS (16,000,000) (2.000,000) $ 1.080,000 GIVEN CH. NWC (400,000) S (600,000 1,000,000 CFFA (16,000,000) $ 480,000 3.900,000 S 4,500,000 4,500,000 S 4,500,000 S 8,580,000 NPV1 $2,505.787.62 NEED TO COMPUTE THIS VALUE WITH NPV FUNCTION NPV2 $622.385.70 NEED TO COMPUTE THIS VALUE WITH NPV FUNCTION IRR 11.07% NEED TO COMPUTE THIS VALUE WITH IRR FUNCTION WACC 7.07% Computed for you in WACC WWP Financial Data Tab WWP Current Discount Rate 10% Given in Case Study