Question
This is from Corporate Finance, 11 edition by Ross. This is mini case chapter 6 part 1. I would like to know how to put
This is from Corporate Finance, 11 edition by Ross. This is mini case chapter 6 part 1. I would like to know how to put in the answers correctly and how to do them. Sorry for the weird format. It would not let me show this in excel word or pdf.
Chapter 6
Bethesda Mining
Land cost $4,000,000
Aftertax land value $6,500,000
Equipment $95,000,000
Equipment salvage 60%
Contract sales/tons 500,000
Contract $/ton $86
Year 1 production 620,000
Year 2 production 680,000
Year 3 production 730,000
Year 4 production 590,000
Spot market $/ton $77
Variable cost/ton $31
Fixed costs $4,100,000
NWC percent 5%
Reclamation costs $2,700,000
Charitable expense $6,000,000
Tax rate 38%
Required return 12%
Year 1 depreciation 14.29%
Year 2 depreciation 24.49%
Year 3 depreciation 17.49%
Year 4 depreciation 12.49%
Time 0 cash flow
Equipment
Land
NWC
Total
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
Sales
Contract
Spot
Total
Sales
VC
FC
Dep
EBT
Tax
NI
add dep
OCF
Beginning NWC
Ending NWC
NWC cash flow
Total cash flow
Book value
Salvage MV
BV
Taxes
Salvage CF
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