## Sunday, February 9, 2014

### Cash Flow Statement

1.Prep atomic number 18 a statement showing the incremental cash flows for this send off off over an 8- stratum menstruum. I = \$1,000,000-Working Capital: WC = \$200,000Yi is: ChWCi = anterior Year WC - sure WC = 0 (i=1 to 7)andChWC0 = -\$200,000The working heavy(p) is recovered so for the end of the social class 8 it leave alone be zipper or: ChWC8 = \$200,000-Depreciation: For the first louvre days Yi (i = 1 to 5):Di = (Invest in plant and equipment) / 5 = \$1,000,000/5 = \$200,000For the historic period 6 to 8 the depreciation will be zero. -Revenues:First year the evaluate revenues will be:R1 = \$900,000For the years Yi (i=2 to 8)Ri = \$1,500,000-Expenses:For all years we will have corroboratory incremental costs of \$80,000For each(prenominal) year the direct costs are 0.55*RiFor each year Yi (i=1 to 8):Ei = \$80,000 + 0.55*Ri then:E1 = \$80,000 + 0.55*\$950,000 = \$602,500For i=2 to 8:Ei = \$80,000 + 0.55*\$1,500,000 = \$905,000-Taxes:The firms fringy tax rate is 35%, taxes will be:Ti = T * (Ri - Ei - Di) with T = 0.35 (i=1 to 8)T1 = 0.35*(\$950,000-\$602500-\$200,000) = \$51625For i=2 to 5Ti = 0.35*(\$1,500,000-\$905,000-\$200,000) = \$138250For i=6 to 8Ti = 0.35*(\$1,500,000-\$905,000-\$0) = \$208250Year Sales orchestrate bell Indirect Cost Depreciation Tax salvage Cash Flow0 -1,200,000 -1,200,0001 950,000 522,500 80,000 200,000 70,000 236,5002 1,500,000 825,000 80,000 200,000 70,000 385,0003 1,500,000 825,000 80,000 200,000 70,000 385,0004 1,500,000 825,000 80,000 200,000 70,000 385,0005 1,500,000 825,000 80,000 200,000 70,000 385,0006 1,500,000 825,000 80,000 357,0007 1,500,000 825,000 80,000 357,0008 1,700,000 825,000 80,000 477,0002.Calculate the Payback time period (P/B) and the NPV for the project. The payback period is how long it will take for a project to model its initial investment back. Y= year for full retrieval of total investment or TIU = Unrecovered costsCFI CF yearPB = Payback = y + u/cfiThe TI = 1,200,000 so at... If you indigence to get a ful! l essay, order it on our website: BestEssayCheap.com

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