Excel Steps

Chicago Turkey Data Turkeys per Year Cost per Turkey Shipping Cost per Turkey Selling Price Total Variable Cost per Turkey Additional Gross Profit per Turkey Investment in Additional Turkeys Land Cost Buildings Cost Labor Expense Depreciation Salvage Value (Buildings) Annual Depreciation Expense Actual Salvage Value (Land) Actual Salvage Value (Buildings) Life of Project Tax Rate Weighted Average Cost of Capital Old Situation New Situation 500,000 6.00 1.50 10.00 7.50 0.50 S 15,000.00 S 150,000.00 S 300,000.00 - S 130,000.00 S 100,000.00 S 40,000.00 S 200,000.00 S 100,000.00 500,000 0 7.00 S 1.00 S 10.00 S 8.00 S I've already provided the the Old and New situation and calculated the Intial Outlay. What you shoud focus on is that, under the Old Situation, there were no fixed costs and now there is a fixed Labor Expense of $130,000 and Depreciation. REMEMBER: Depreciation is not a cash flow item however the tax savings from depreciation is a cash flow savings. 3 Now, complete the areas shaded in Purple 34% 11% Period Cash Flow $465,000.00 Initial Outlay Annual After-tax Cash Flow Terminal Cash Flow 0 Profitability Measures Payback Period NPV Profitability Index IRR MIRR (use for Re-invest Rate Chicago Turkey Data Turkeys per Year Cost per Turkey Shipping Cost per Turkey Selling Price Total Variable Cost per Turkey Additional Gross Profit per Turkey Investment in Additional Turkeys Land Cost Buildings Cost Labor Expense Depreciation Salvage Value (Buildings) Annual Depreciation Expense Actual Salvage Value (Land) Actual Salvage Value (Buildings) Life of Project Tax Rate Weighted Average Cost of Capital Old Situation New Situation 500,000 6.00 1.50 10.00 7.50 0.50 S 15,000.00 S 150,000.00 S 300,000.00 - S 130,000.00 S 100,000.00 S 40,000.00 S 200,000.00 S 100,000.00 500,000 0 7.00 S 1.00 S 10.00 S 8.00 S I've already provided the the Old and New situation and calculated the Intial Outlay. What you shoud focus on is that, under the Old Situation, there were no fixed costs and now there is a fixed Labor Expense of $130,000 and Depreciation. REMEMBER: Depreciation is not a cash flow item however the tax savings from depreciation is a cash flow savings. 3 Now, complete the areas shaded in Purple 34% 11% Period Cash Flow $465,000.00 Initial Outlay Annual After-tax Cash Flow Terminal Cash Flow 0 Profitability Measures Payback Period NPV Profitability Index IRR MIRR (use for Re-invest Rate