Questions: Recreate the income statement, calculate company.... (hint part)
A32 Target Cash Balance D E F G H 1 J K L L M N N o O P P Q R s A B C 1 Case A 2 Information for Capital budgetting Excersize and the Forecasted Income Statement 3 4 Sales $ 230,000 5 Variable costs as % of Sales % 10% 6 Fixed Cost 6 $ 65,000 7 Capital Expense $ 525,000 8 Increase in NOWC $ 10,000 9 Debt/Assets (financial leverage) 10% 10 Tax Rate 20% * 11 WACC 6% 10 12 Average Interest Rate on Debt 5% 13 Average Life of the Project 5 Years Togg 14 You can use linear depreciation 15 Increase in Sales 15% 16 Decrease in Fixed Costs 15% 17 Decrease in Capital Assets 15% 18 19 Information for the cash budget 20 21 Month Nov Dec 22 Sales $ 13,800 ###### 23 24 Total Sales $ 230,000 25 Collections during month 55% 26 Collections 1 month after sale 25% 27 Collections 2 months after sale and beyond 20% 28 29 Purchases as % of Next Month Sales 63% 30 Fixed Monthly Cost $ 5,417 31 Quaterly Taxes $ 1,716 20 32 Target Cash Balance $ 12,000 33 34 Hint: 35 Recreate the income statement 36 Calculate company results in this case you can use ROE=NI / Capital Expense) 37 Calculate the Free Cash Flows for the Capital budgeting Excersize 38 Calculate the NPV 39 Modify the numbers for your scenario/sensitivity analysis 40 Use the Increase in sales, decrease in Fixed costs and decrease in capital assets to create a forecasted Income Statement 41 Recreate the cash budget (page 564 in the textbook) 42 Jan Feb Mar Apr Mai Jun Jul Aug Sep Oct ###### Nov ###### Dec ###### ###### ###### ###### ###### ###### Sheet1 # A32 Target Cash Balance D E F G H 1 J K L L M N N o O P P Q R s A B C 1 Case A 2 Information for Capital budgetting Excersize and the Forecasted Income Statement 3 4 Sales $ 230,000 5 Variable costs as % of Sales % 10% 6 Fixed Cost 6 $ 65,000 7 Capital Expense $ 525,000 8 Increase in NOWC $ 10,000 9 Debt/Assets (financial leverage) 10% 10 Tax Rate 20% * 11 WACC 6% 10 12 Average Interest Rate on Debt 5% 13 Average Life of the Project 5 Years Togg 14 You can use linear depreciation 15 Increase in Sales 15% 16 Decrease in Fixed Costs 15% 17 Decrease in Capital Assets 15% 18 19 Information for the cash budget 20 21 Month Nov Dec 22 Sales $ 13,800 ###### 23 24 Total Sales $ 230,000 25 Collections during month 55% 26 Collections 1 month after sale 25% 27 Collections 2 months after sale and beyond 20% 28 29 Purchases as % of Next Month Sales 63% 30 Fixed Monthly Cost $ 5,417 31 Quaterly Taxes $ 1,716 20 32 Target Cash Balance $ 12,000 33 34 Hint: 35 Recreate the income statement 36 Calculate company results in this case you can use ROE=NI / Capital Expense) 37 Calculate the Free Cash Flows for the Capital budgeting Excersize 38 Calculate the NPV 39 Modify the numbers for your scenario/sensitivity analysis 40 Use the Increase in sales, decrease in Fixed costs and decrease in capital assets to create a forecasted Income Statement 41 Recreate the cash budget (page 564 in the textbook) 42 Jan Feb Mar Apr Mai Jun Jul Aug Sep Oct ###### Nov ###### Dec ###### ###### ###### ###### ###### ###### Sheet1 #
