Search Sign in - Excel Help 0 x Comments Share AutoSave C H P proj[191)BKC Protected View File Home Insert Page Layout Formulas Data Review View B57 . x v for 4 A B C D E 1 Capital Budgeting Decisions (Scenario 2) G H I J K L M N O P Q R $ $ 4 1) Life Period of the Equipment = 4 years 8) Sales for first year (1) 5 2) New equipment cost $ (200,000)9) Sales increase per year 6 3) Equipment ship & install cost $ (35,000) 10) Operating cost (60% of Sales) 1 4) Related start up cost S (5,000) (as a percent of sales in Year 1) 8 5) Inventory increase 25,000 11) Depreciation (Full depreciation) 96) Accounts Payable increase $ 5,000 12) Marginal Corporate Tax Rate (T) 10 7) Equip. salvage value before tax $ 15,000 13) Cost of Capital (Discount Rate) 200,000 5% (120,000) -60% (240,000) S 21% 10% 13 Year 14 15 Operations: I/S 16 Revenue 17 Operating Cost 18 Depreciation 19 EBIT 20 Taxes 21 Net Income $ 200,000 S (120,000) $(240,000) S (160,000) $ (33.600) S (126,400) 22 23 Add back Depreciation $ 240,000 Total Operating Cash Flow $ 113,600 $ - $ - $ 27 ESTIMATING Initial Outlay (Cash Flow, CFO, T=0) CFO CF1 CF2 CF3 C F4 Sheet1 Sheet2 Sheet3 B 1 - + 1 7:51 PM 100% 5 Type here to search O e @ SNOW 12/12/2019