need help solving for net salavage value, I know how to do WACC

Template: FIN3210 STEP #1 Calculate CFO Cost Basis $ 9,600,000.00 Change in NWC 3 700 000 00 CFO $ 10, 200,000.00 STEP #2 Calculate OCF1 - OCF7 As a result, you base your cost of capital assumptions on the following o A similar firm currently has 608 bonds outstanding with the following terms. Remaining Maturity = 10 years, Coupon Rate = 6.20% (semiannual payl, Current Price = $1040. o A similar firm currently has 68,000 common shares outstanding with the following price and market terms: a Stock price = $58, Beta = 1.12 Rf Rate = 1%, ERm = 8% A similar firm currently has 18,000 Year Year 2 Year 2 Year 4 Yews Year o Yew Saless 4.692,000 00S 5,175,000.00 5.175.000,00 5.474,000.00 5 5,474 000 005 5.658,000 003 5.658,000.00 Costs 2,721.300 D $ 3,001,500.00 $ 2,846.250.00 S 3.010,700.00 $ 3,010,700.00 2.998.740.00 $ 2.998.740 00 2 Deprec. $ 1,357,550.00 $ 2,320,650 003 1.001 560.00 $ 1.186,550.00 848,350.00 S 347 400.00 848 360.00 3 EBITS 813 090.00 5 (153.050.00) 887,200.00 $ 1.276,750.00 5 1.814.950.00 $ 1,811,860 DOS 1810.910.00 1 Taxs 171.806 20s 142,854 180.810 00 S 357.490.00 $ 452 186 00 S 507,320 803 607,054 80 5 5 OCF1 OCF2 OCF3 OCF4 OCES OCFG OCFY 7 EBITS 613,090.003 (153.050.00) 667,200.00 1.276,750.00 1,014 950.00 5 1,811,800.00 5.810 910.00 8 Depreciations 1.357,550.00 5 2,320,550 00 $ 1.001.550 00$ 1.186.560.00 $ 848,350.00 $ 847.400.00 S 848 350.00 9 Taxes 5 171.665.205 (42.854.00) 180.810.00 357,490.00 $ 452.180 00s 507.320.00 507054.00 0 OCF $ 1.798,974 803 2.216,354.00 S 2,141,934.00 $ 2,105,810.00 2,011, 114.00 S 2,151,939 20 $ 2,152,205.20 2 STEP 13 Add NWC & Net Salvage Value to OCF7 23 1. What is the initial cash outlay (CFO) and what are the operating cash flows in 23 NWG years 1 thru 7-adjusted for taxes and depreciation? Net Salvage Value Calculation 25 NSV 2. What are the terminal-year cash flows added to the operating cash flow in year Marie Value 8? 26 Book Value 3. What is the WACC? According to the Static Theory, why is the WACC 50 27 Capital Oair Loss different with more/less debt? What are the implications of different weights on 28 Tax Gain Loss WAOC and the LARC's NPV? 29 4. Given your results for CFO thru C07 and the lowest available WACC, would you 30 Mat Salvage have recommended that LARC take-on this project with its required IRR of 14%? 32 STEP #4 Calculate Cost of Capital (WACC) Explain the significance of the NPV & IRR to support your answer 33 Weight of Debt Rd 36 Weight of Common Re 35 Weight of Pro Po Tax Rate 8321 WACC 40 STEP N5 Final Project Cash Flows & NPV 41 42 43 CFO C01 45 CO2 Yee Year 2 Year MACRS schede 14.2014 24.45 1749 Number f D Template: FIN3210 STEP #1 Calculate CFO Cost Basis 3 9.500,000.00 Change in NWC S , CFO 5 10,200,000.00 STEP #2 Calculate OCF1 - OCF7 E G H As a result, vou base your cost of capital assumptions on the following o A similar firm currently has 608 bonds outstanding with the following terms Remaining Maturity - 10 years, Coupon Rate 6.20% (semiannual payl. Current Price - $1040. A similar firm currently has 68,000 common shares outstanding with the following price and market terms: Stock price $58, Beta 1.12, Rf Rate = 1%, ERmA similar firm currently has 18,000 Year 1 Year 2 Year 2 Year 4 Year 5 Year Year 7 Saless 4.692.000,00 36,175,000 00S 5,175 000 006.474,000 003 5,474,000.00 6.058.000.00 5.658,000 00 Costs 3 2.721,300 005 3.00 1.500.00 2840 250 00153010,700 DO 3 3.010.700.00 2,090,740.00 5 2.998,740.00 Depre3 1.357,550 003 2320,550 005 1.001.680.001.180,550 00S 043.350.00 847,400.00 $ 848,350.00 EBBITS 313 090005 (153.050.00 5 607 200,00 3 1276.750.00 1014.950 000 1.811 36000 3 1,810,910 00 Taxs 171,665.205 (42.85403 186,810.00 $ 357,490 00 462,100.00 5 507.320.803 307,054.80 OCF1 OCF2 OCF3 OCF4 OCF5 OCFG OCEZ EBIT 5 013.030 003 1163.000 0 3 067 200 003 1 270,750.00 1.014.050 000 1.811,800.00 1,310.910.00 Depreciation 1.357,550.00 $2,228,550 00 S 1.001.000 003 1.180,650.00 $ 348,350.00 347,400.00 340.350.00 Taxes 5 171 606.203 (42.85400) 188.818.00 357 490.005 452,100.00 5 507,320.80 507.064.30 OCFS 1,738,374 3032216354.00 2141,934 00 2,105,010,005 2011 14.00 2.151,939 20 2,152,205 20 TEP #3 Add NWC & Net Salvage Value to OCF7 1. What is the initial cash outlay (CFO) and what are the operating cash flows in NWC Net Salvage Value Catoulation years 1 thru 7-adjusted for taxes and depreciation? 2. What are the terminal-year cash flows added to the operating cash flow in year NSV Marat Value 8? Book Value a. What is the WACC? According to the Static Theory, why is the WACC 10 Capital OinLow different with more/less debt? What are the implications of different weights on Tax Gin/Low WACC and the LARC's NPV? 4 Given your results for CFO thru 07 and the lowest available WACC, would you Net Salvage have recommended that LARC take on this project with its required IRR of 14? TEP #4 Calculate Cost of Capital (WACC) Explain the significance of the NPV & IRR to support your answer Weight of Det Rd Weight of Common Re Weight of Pd Rp Tak Rate WACC Template: FIN3210 STEP #1 Calculate CFO Cost Basis $ 9,600,000.00 Change in NWC 3 700 000 00 CFO $ 10, 200,000.00 STEP #2 Calculate OCF1 - OCF7 As a result, you base your cost of capital assumptions on the following o A similar firm currently has 608 bonds outstanding with the following terms. Remaining Maturity = 10 years, Coupon Rate = 6.20% (semiannual payl, Current Price = $1040. o A similar firm currently has 68,000 common shares outstanding with the following price and market terms: a Stock price = $58, Beta = 1.12 Rf Rate = 1%, ERm = 8% A similar firm currently has 18,000 Year Year 2 Year 2 Year 4 Yews Year o Yew Saless 4.692,000 00S 5,175,000.00 5.175.000,00 5.474,000.00 5 5,474 000 005 5.658,000 003 5.658,000.00 Costs 2,721.300 D $ 3,001,500.00 $ 2,846.250.00 S 3.010,700.00 $ 3,010,700.00 2.998.740.00 $ 2.998.740 00 2 Deprec. $ 1,357,550.00 $ 2,320,650 003 1.001 560.00 $ 1.186,550.00 848,350.00 S 347 400.00 848 360.00 3 EBITS 813 090.00 5 (153.050.00) 887,200.00 $ 1.276,750.00 5 1.814.950.00 $ 1,811,860 DOS 1810.910.00 1 Taxs 171.806 20s 142,854 180.810 00 S 357.490.00 $ 452 186 00 S 507,320 803 607,054 80 5 5 OCF1 OCF2 OCF3 OCF4 OCES OCFG OCFY 7 EBITS 613,090.003 (153.050.00) 667,200.00 1.276,750.00 1,014 950.00 5 1,811,800.00 5.810 910.00 8 Depreciations 1.357,550.00 5 2,320,550 00 $ 1.001.550 00$ 1.186.560.00 $ 848,350.00 $ 847.400.00 S 848 350.00 9 Taxes 5 171.665.205 (42.854.00) 180.810.00 357,490.00 $ 452.180 00s 507.320.00 507054.00 0 OCF $ 1.798,974 803 2.216,354.00 S 2,141,934.00 $ 2,105,810.00 2,011, 114.00 S 2,151,939 20 $ 2,152,205.20 2 STEP 13 Add NWC & Net Salvage Value to OCF7 23 1. What is the initial cash outlay (CFO) and what are the operating cash flows in 23 NWG years 1 thru 7-adjusted for taxes and depreciation? Net Salvage Value Calculation 25 NSV 2. What are the terminal-year cash flows added to the operating cash flow in year Marie Value 8? 26 Book Value 3. What is the WACC? According to the Static Theory, why is the WACC 50 27 Capital Oair Loss different with more/less debt? What are the implications of different weights on 28 Tax Gain Loss WAOC and the LARC's NPV? 29 4. Given your results for CFO thru C07 and the lowest available WACC, would you 30 Mat Salvage have recommended that LARC take-on this project with its required IRR of 14%? 32 STEP #4 Calculate Cost of Capital (WACC) Explain the significance of the NPV & IRR to support your answer 33 Weight of Debt Rd 36 Weight of Common Re 35 Weight of Pro Po Tax Rate 8321 WACC 40 STEP N5 Final Project Cash Flows & NPV 41 42 43 CFO C01 45 CO2 Yee Year 2 Year MACRS schede 14.2014 24.45 1749 Number f D Template: FIN3210 STEP #1 Calculate CFO Cost Basis 3 9.500,000.00 Change in NWC S , CFO 5 10,200,000.00 STEP #2 Calculate OCF1 - OCF7 E G H As a result, vou base your cost of capital assumptions on the following o A similar firm currently has 608 bonds outstanding with the following terms Remaining Maturity - 10 years, Coupon Rate 6.20% (semiannual payl. Current Price - $1040. A similar firm currently has 68,000 common shares outstanding with the following price and market terms: Stock price $58, Beta 1.12, Rf Rate = 1%, ERmA similar firm currently has 18,000 Year 1 Year 2 Year 2 Year 4 Year 5 Year Year 7 Saless 4.692.000,00 36,175,000 00S 5,175 000 006.474,000 003 5,474,000.00 6.058.000.00 5.658,000 00 Costs 3 2.721,300 005 3.00 1.500.00 2840 250 00153010,700 DO 3 3.010.700.00 2,090,740.00 5 2.998,740.00 Depre3 1.357,550 003 2320,550 005 1.001.680.001.180,550 00S 043.350.00 847,400.00 $ 848,350.00 EBBITS 313 090005 (153.050.00 5 607 200,00 3 1276.750.00 1014.950 000 1.811 36000 3 1,810,910 00 Taxs 171,665.205 (42.85403 186,810.00 $ 357,490 00 462,100.00 5 507.320.803 307,054.80 OCF1 OCF2 OCF3 OCF4 OCF5 OCFG OCEZ EBIT 5 013.030 003 1163.000 0 3 067 200 003 1 270,750.00 1.014.050 000 1.811,800.00 1,310.910.00 Depreciation 1.357,550.00 $2,228,550 00 S 1.001.000 003 1.180,650.00 $ 348,350.00 347,400.00 340.350.00 Taxes 5 171 606.203 (42.85400) 188.818.00 357 490.005 452,100.00 5 507,320.80 507.064.30 OCFS 1,738,374 3032216354.00 2141,934 00 2,105,010,005 2011 14.00 2.151,939 20 2,152,205 20 TEP #3 Add NWC & Net Salvage Value to OCF7 1. What is the initial cash outlay (CFO) and what are the operating cash flows in NWC Net Salvage Value Catoulation years 1 thru 7-adjusted for taxes and depreciation? 2. What are the terminal-year cash flows added to the operating cash flow in year NSV Marat Value 8? Book Value a. What is the WACC? According to the Static Theory, why is the WACC 10 Capital OinLow different with more/less debt? What are the implications of different weights on Tax Gin/Low WACC and the LARC's NPV? 4 Given your results for CFO thru 07 and the lowest available WACC, would you Net Salvage have recommended that LARC take on this project with its required IRR of 14? TEP #4 Calculate Cost of Capital (WACC) Explain the significance of the NPV & IRR to support your answer Weight of Det Rd Weight of Common Re Weight of Pd Rp Tak Rate WACC