Question: Please guide me and help me do this analysis. I don't know how to calculate Expenses and VC warranty from year 1 to year 5.

Please guide me and help me do this analysis. I don't know how to calculate Expenses and VC warranty from year 1 to year 5.

Detroit Engine Average
Inputs Base Case
Equipment Cost $ 1,000,000,000
Training Costs (Year 1 & Year 2) $ 200,000,000
Salvage Value, Year 20 $ 10,000,000
Depreciation Per Year $ 50,000,000
Units Sold Every Year 11,000
Sales price per unit, Year 1 $ 220,000
Annual change in sales price, after Year 1 6.50%
Variable cost per unit (VC), Year 1 $ 170,000
Labor Cost $ 50,000
Components & Parts Per Bus $ 95,000
Engine $ 25,000
Warranty (Present Value) $ 5,997
Annual change in VC, after Year 1 6.50%
Fixed Cost (FC), Year 1 $ 250,000,000
Annual change in FC, after Year 1 6.50%
Project WACC 7.95%
Tax Rate 30.00%
Working Capital as % of next year's sales 10.00%

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