Question: Inputs Base Case Equipment Cost $3,400.00 Project Length 4 Years Straight Line Depreciation $850.00 Salvage Value, Year 4 $300.00 Units Sold, Year 1 550.00 Sales

Inputs

Base Case

Equipment Cost

$3,400.00

Project Length

4 Years

Straight Line Depreciation

$850.00

Salvage Value, Year 4

$300.00

Units Sold, Year 1

550.00

Sales price per unit, Year 1

$11.60

Annual change in sales price, after Year 1

2.0%

Variable cost per unit (VC), Year 1

$6.00

Annual change in VC, after Year 1

2.0%

Fixed Cost (FC), Year 1

$2,000.00

Annual change in FC, after Year 1

2.0%

Project WACC

11.85%

Tax Rate

40.0%

Working Capital as % of next year's sales

12.00%

Put together a Capital Budget Analysis.

Prepare the following return analysis:

1). Net Present Value

2). Internal Rate of Return

3). Profitability Index

4). Payback in Years

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