0 1 2

Investment in Facility - 300,000.00

Working Capital Investment - 50,000.00 - -
TOTAL NET INVESTMENT - 350,000.00 - -

Revenues 200,000.00 200,000.00

Cost of Goods Sold - 60,000.00 - 60,000.00
Gross Profit 140,000.00 140,000.00
Deprecation Expense 40,000.00 40,000.00
EBIT 100,000.00 100,000.00
Taxes 40,000.00 40,000.00
NOPAT 60,000.00 60,000.00
Depreciation Expense Add Back 40,000.00 40,000.00
OPERATING CASH FLOW 100,000.00 100,000.00

Terminal Cash Flows:

Return of Investment in Working Capital
Net Resale Value of Facility:
Resale Value/Price
Book Value
Net Gain (Loss)
Tax
Net Proceeds
Total Terminal Cash Flows
NET CASH FLOW - 350,000.00 100,000.00 100,000.00

NET CASH FLOW

 3 4 5 6 GIVEN
No. of Years 6
- - - - Unit Price 5.00
- - - - Unit Sales 40,000.00
Var Cost per Unit 1.50
200,000.00 200,000.00 200,000.00 200,000.00 Fixed Capital 300,000.00
- 60,000.00 - 60,000.00 - 60,000.00 - 60,000.00 Working Capital 50,000.00
140,000.00 140,000.00 140,000.00 140,000.00 Salvage Value 60,000.00
40,000.00 40,000.00 40,000.00 40,000.00 Tax Rate 40%
100,000.00 100,000.00 100,000.00 100,000.00 WACC 12%
40,000.00 40,000.00 40,000.00 40,000.00
60,000.00 60,000.00 60,000.00 60,000.00
40,000.00 40,000.00 40,000.00 40,000.00
100,000.00 100,000.00 100,000.00 100,000.00

50,000.00

60,000.00
- 60,000.00
-
-
60,000.00
110,000.00
100,000.00 100,000.00 100,000.00 210,000.00
NPV 116,870.16
IRR 22.00566%
 Changes Unit Price Annual Unit Sales Cost per Unit Salvage Value

0.5 363,554.60 289,549.26 42,864.82 132,069.09

0.45 338,886.15 272,281.35 50,265.36 130,549.20
0.4 314,217.71 255,013.44 57,665.89 129,029.30
0.35 289,549.26 237,745.53 65,066.42 127,509.41
0.3 264,880.82 220,477.62 72,466.96 125,989.52
0.25 240,212.38 203,209.71 79,867.49 124,469.62
0.2 215,543.93 185,941.80 87,268.02 122,949.73
0.15 190,875.49 168,673.89 94,668.56 121,429.84
0.1 166,207.04 151,405.98 102,069.09 119,909.94
0.05 141,538.60 134,138.07 109,469.62 118,390.05
0 116,870.16 116,870.16 116,870.16 116,870.16
-0.05 92,201.71 99,602.24 124,270.69 115,350.26
-0.1 67,533.27 82,334.33 131,671.22 113,830.37
-0.15 42,864.82 65,066.42 139,071.76 112,310.48
-0.2 18,196.38 47,798.51 146,472.29 110,790.58
-0.25 - 6,472.06 30,530.60 153,872.82 109,270.69
-0.3 - 31,140.51 13,262.69 161,273.35 107,750.80
-0.35 - 55,808.95 - 4,005.22 168,673.89 106,230.90
-0.4 - 80,477.40 - 21,273.13 176,074.42 104,711.01
-0.45 - 105,145.84 - 38,541.04 183,474.95 103,191.12
-0.5 - 129,814.28 - 55,808.95 190,875.49 101,671.22
RANGE 493,368.88 345,358.22 148,010.66 30,397.87

Investment in Facility - 300,000.00 Salvage Value 60,000.00

Working Capital - 50,000.00 Return on Inv 50,000.00
Total Net Investment - 350,000.00 FV 110,000.00

Cash Flow = (Unit Price x Cost per Unit) x Annual Sales Unit x (1-TR) + Depreciation x Tax Rate
 Tax Rate Required Return Changes Unit Price Annual Unit Sales
5.00 40,000.00
34,642.01 40,507.73 0.5 7.50 60,000.00
42,864.82 47,221.82 0.45 7.25 58,000.00
51,087.64 54,121.75 0.4 7.00 56,000.00
59,310.45 61,214.15 0.35 6.75 54,000.00
67,533.27 68,505.93 0.3 6.50 52,000.00
75,756.08 76,004.30 0.25 6.25 50,000.00
83,978.90 83,716.80 0.2 6.00 48,000.00
92,201.71 91,651.25 0.15 5.75 46,000.00
100,424.53 99,815.87 0.1 5.50 44,000.00
108,647.34 108,219.19 0.05 5.25 42,000.00
116,870.16 116,870.16 0 5.00 40,000.00
125,092.97 125,778.09 -0.05 4.75 38,000.00
133,315.78 134,952.75 -0.1 4.50 36,000.00
141,538.60 144,404.32 -0.15 4.25 34,000.00
149,761.41 154,143.44 -0.2 4.00 32,000.00
157,984.23 164,181.26 -0.25 3.75 30,000.00
166,207.04 174,529.43 -0.3 3.50 28,000.00
174,429.86 185,200.14 -0.35 3.25 26,000.00
182,652.67 196,206.14 -0.4 3.00 24,000.00
190,875.49 207,560.80 -0.45 2.75 22,000.00
199,098.30 219,278.09 -0.5 2.50 20,000.00
164,456.29 178,770.37

Cash Flow 100,000.00

WACC 12%
Years 6

ciation x Tax Rate

Cost per Unit Salvage Value Tax Rate Required Return Depreciation
1.50 60,000.00 40% 12% 40,000.00
2.25 90,000.00 60% 18%
2.18 87,000.00 58% 17%
2.10 84,000.00 56% 17%
2.03 81,000.00 54% 16%
1.95 78,000.00 52% 16%
1.88 75,000.00 50% 15%
1.80 72,000.00 48% 14%
1.73 69,000.00 46% 14%
1.65 66,000.00 44% 13%
1.58 63,000.00 42% 13%
1.50 60,000.00 40% 12%
1.43 57,000.00 38% 11%
1.35 54,000.00 36% 11%
1.28 51,000.00 34% 10%
1.20 48,000.00 32% 10%
1.13 45,000.00 30% 9%
1.05 42,000.00 28% 8%
0.98 39,000.00 26% 8%
0.90 36,000.00 24% 7%
0.83 33,000.00 22% 7%
0.75 30,000.00 20% 6%
1-Tax Rate
60%
40%
42%
44%
46%
48%
50%
52%
54%
56%
58%
60%
62%
64%
66%
68%
70%
72%
74%
76%
78%
80%