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0 1 2 3 4 5 Market Units 100 000 100 000 100 000 100 000 100 000 Market values Initial Market Share 50% 50% 50% 50% 50% Units 100 000 Units 50 000 50 000 50 000 50 000 50 000 Growth 0% Price per unit 400 380 361 343 326 Share 50% Cost per unit 320 304 289 274 261 Company values Initial Revenues 20 000 000 19 000 000 18 050 000 17 147 500 16 290 125 Price per unit 400 Variable cost 16 000 000 15 200 000 14 440 000 13 718 000 13 032 100 Price growth -5% Fixed cost 4 300 000 4 300 000 4 300 000 4 300 000 4 300 000 Cost per unit 80% Depreciation 2 000 000 2 000 000 2 000 000 2 000 000 2 000 000 Fixed cost 4 300 000 Profit before tax -2 300 000 -2 500 000 -2 690 000 -2 870 500 -3 041 975 Tax rate 30% Taxes (@30%) 690 000 -750 000 807 000 -861 150 -912 593 CAPEX NOPAT -1 610 000 -1 750 000 -1 883 000 -2 009 350 -2 129 383 Discount rate 6% Depreciation 2 000 000 2 000 000 2 000 000 2 000 000 2 000 000 Depreciation 2 000 000 CAPEX 0 Change in Working Capital Cash Flow 390 000 250 000 117 000 -9350 -129 383 PV Cash Flow 367 925 222 499 98 235 -7 406 -96 682 NPV 584 571 584 571 IRR Payback period Discounted payback period " Sales -5.0% -5.0% -5.0% XEB IT 7.6% 6.7% 6.0% DOL -1.5 -1.3 -1.2 Financial Break-even

Answer rating: 100% (QA)

Market Units and Values Initial Market Share 50 Units 100000 Price per Unit 400 decreasing by 5 annually Cost per Unit 80 of the price Company Values Initial Revenues Starting at 20000000 and decreasi... View the full answer