Project Data

Alternative 4

After-Tax Salvage Cash Flow

Project Type

Mut. Excl. w/Alt 3

Ending Book Value

MV - BV if positive would be a capital gain.

Equipment for project at t=0

205,000

Ending Market Val.

Capital Gain would mean tax is owed.

Installation costs at t=0

55,000

BV - MB

Company would have cash inflow of the MV and outflow of taxes

Net Working Cap. Initial Investment*

45,000

*At the end of the project all NWC borrowed from the firm will be returned to the firm (recouped)

The net would be the A.T. Salvage CF

Initial Sales

130,000

A.T. Salvage CF

Hint: MV + ( (BV-MB) *Tax Rate)

Annual Sales Growth Rates

10%

Annual Variable costs as a % of Sales

22%

Annual Fixed Costs

7,000

Project life

5

Method of Depreciation

MACRS

Expected Life of Equipment

3

Market Value at t=T

33,000

Salvage Value at t=T

0

Use the ABOVE data inputs to create Pro Forma Project Valuation and Summary of Annual Cash Flows

ALL cells must be linked to other cells, or contain a formula linking cells.

Only the number/value 1 can used in any excel formula.

*yellow only

please include Excel formulas for work

Alternative 2 5 333% 44.45% 14,81% 74198 MACRS % Depreciation Ending Book Value Alternate 44454 1431 7419 MACRS Depreciation Ending Book Value Timeline Hint My((BV.MB "Tax Rate Pro Forma & Summary of Annual CF Initial lavestment Net Working Capital Aller-Tax Saage Chow Pro Forma Income Sulema Reves Operating Expo Depreciation Lispenses Operating Profit Tax Net Prote Anal Operating without Summary of Cash Flow