The following information is given for a wastewater treatment facility: Total Bare Module Investment: $2,000,000 Service Facility
Question:
The following information is given for a wastewater treatment facility:
Total Bare Module Investment: $2,000,000
Service Facility Cost: $50,000
Land Cost: $200,000
Startup Cost: $200,000
Working Capital: $146,875
Site Preparation Costs: 5% of Bare Module Investment
Allocation Cost: 5% of Bare Module Investment
Plant Contingency Cost: 25% of Direct Permanent Investment
Royalty Cost: 5% of Total Depreciable Capital
Plant Production Life: 5 years
Sales: $750,000/year
Cost of Production
(Excluding Depreciation): $50,000/year
Tax rate: 21%
Depreciation Method: Straight-Line with a depreciation life equal to the production life of plant
Salvage value: $0
Part A: Find the Total Depreciable Capital and Total Capital Investment
Part B: Calculate the annual depreciation and annual net profits over the 5 years of production.
Part C: Find Payback Period
Part D. Find ROI