Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me calculate the NPV and IRR for this company. Additionally, is a Discounted Cash Flow (DCF) of 14% agreeable or disagreeable? Why or

Please help me calculate the NPV and IRR for this company. Additionally, is a Discounted Cash Flow (DCF) of 14% agreeable or disagreeable? Why or Why Not?

Included are the income statement, Operating Cash Flow Table, Total Cash Flow From Assets Table, and After-Tax Salvage Value.image text in transcribed

OCF

image text in transcribed

CFFA

image text in transcribed

After Tax Salvage Value

image text in transcribed

0 8700 35,000 $ 304,500,000 $ - - S S 3325 4744 7700 2723 0 80,000 $ 80,000 $ 80,000 379,520,000 $ 266,000,000 $ 217,840,000 58,100,000 $ 321,420,000 $ 266,000,000 $ 217,840,000 Comprehensive Income Statement (W/ Introduction) Year W/O Introduction Units Sold 12000 10750 Price/Unit $ 35,000 $ 35,000 $ Total Revenue $ 420,000,000 $ 376,250,000 $ W/ Introduction Units Sold CCS 5750 6437 CC1 11000 9750 Price/Unit CCS $ 80,000 $ 80,000 $ cc1 $ 32,000 $ 32,000 $ Total Revenue $ 460,000,000 $ 514,960,000 $ Erosion Cost $ 68,000,000 $ 64,250,000 $ Net Revenues $ 392,000,000 $ 450,710,000 $ w/o Introduction Units Sold 12000 10750 VC/Unit $ 19,950 $ 19,950 $ Total Variable costs $ 239,400,000 $ 214,462,500 $ W/ Introduction Units Sold CCS 5750 6437 CC1 11000 9750 Variable Cost/Unit CCS 49,600 $ 49,600 $ CC1 $ 19,950 $ 19,950 $ Total Variable Costs $ 285,200,000 $ 319,275,200 $ VC Erosion Benefit $ 19,950,000 $ 19,950,000 $ Net Variable Costs $ 265,250,000 $ 299,325,200 $ Fixed Costs $ 35,000,000 $ 35,000,000 $ Total Fixed Costs $ 35,000,000 $ 35,000,000 $ 8700 19,950 173,565,000 $ $ - - $ $ . . 3325 2723 4744 7700 0 49,600 19,950 235,302,400 19,950,000 215,352,400 $ 49,600 $ 49,600 $ $ 164,920,000 $ 135,060,800 $ $ 164,920,000 $ 135,060,800 - > CCS 35,000,000 $ 35,000,000 $ 35,000,000 $ 35,000,000 $ 35,000,000 35,000,000 Depreciation $ 64,305,000 $ 110,205,000 $ 78,705,000 $ 56,205,000 $ 40,185,000 EBIT Tax (25%) Net Income $ $ $ 27,445,000 6,861,250 20,583,750 $ $ $ 6,179,800 1,544,950 4,634,850 $ $ $ (7,637,400) $ (1,909,350) $ (5,728,050) $ 9,875,000 2,468,750 7,406,250 $ $ $ 7,594,200 1,898,550 5,695,650 NWC $ 92,000,000.0 $ 102,992,000.0 $ 75,904,000.0 $ 53,200,000.0 $ 43,568,000.0 YI Y3 w/ Introduction Year EBIT Depreciation (Taxes) OCE $ $ $ $ 27,445,000 64,305,000 6,861,250 84,888,750 Y2 $ $ $ $ 6,179,800 110,205,000 1,544,950 114,839,850 $ $ $ $ Y4 (7,637,400) $ 78,705,000 $ (1,909,350) $ 72,976,950 $ Y5 9,875,000 $ 56,205,000 $ 2,468,750 $ 63,611,250 $ 7,594,200 40,185,000 1,898,550 45,880,650 OCF Total Cash Flow from Assets (CFFA) Table Year $ Change in NWC $ Net Capital Spending $ (450,000,000) CFFA $ (450,000,000) $ 84,888,750 $ (92,000,000) $ 114,839,850 $ (10,992,000) $ 72,976,950 $ 27,088,000 $ 63,611,250 $ 22,704,000 $ $ 86,315,250 $ 45,880,650 9,632,000 291,348,750 346,861,400 (7,111,250) $ 103,847,850 $ 100,064,950 $ ATSV = SV - (SV-BV)*t Salvage Value (SV) $ Purchase Price $ Book Value (BV) $ Total Depreciation $ 355,000,000 450,000,000 100,395,000 349,605,000 ATSV Tax Burden $ $ 291,348,750 63,651,250

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Government And Not For Profit Accounting

Authors: Martin Ives, Joseph R. Razek, Gordon A. Hosch

5th Edition

0130464147, 978-0130464149

More Books

Students also viewed these Accounting questions

Question

Does your message reiterate its main idea?

Answered: 1 week ago