Using the appropriate column on Financing Income Statement spreadsheet add relevant accounting figures from the
Project Equipment and Project Acquisition Tabs from Phase 2A. As an example the capital equipment tab indicates
that additional operating savings have been generated - reduce administrative expenses.

Please fill out the Pink Squares with values using the excel information below.

Equipment Project information

Acquistion Project

BFIN 492
FRENZY Ltd. Project Information
A	Business Acquisition		Revenue (Cost) - $	Capital Budgeting
	Evaluation of Option costs		(1,200,000)
	Selected Option - Investment
	Accounts Receivable		$ 4,000,000
	Inventory		3,075,000
	Equipment		5,500,000
	Land		5,750,000
	Building		6,000,000
	Assets Acquired		24,325,000
	Liabilities Assumed
	Accounts Payable		(2,035,000)
	Mortgage		(1,540,000)
			(3,575,000)
	Venture Short Term Loan		$ 20,750,000
	Working Capital increase		Year 3
	Accounts Receivable		1,000,000
	Inventory		1,500,000
	Building Remaining Life		20 Years
	Salvage Value		600,000
	Amortization		straight line
	Annual Amortization		$ 270,000
	Equipment Life		20 Years
	Salvage Value		1,050,000
	Amortization		straight line
	Annual Amortization		$ 222,500	$ 492,500
	Base + Incremental Revenue - Last Year		12,825,000
	Terminal Value Multiple		1.60	Terminal value
	Terminal Value		20,520,000
	Incremental Benefits of Investment		Per annum
	Revenues - 1- 2- 3- 4 - 5		$ 11,500,000
	Product costs - 1- 2- 3- 4- 5		(4,250,000)
	Revenues - 6- 7- 8- 9 - 10		$ 12,500,000
	Product costs - 6- 7- 8- 9- 10		(6,875,000)
	Incremental revenues - current business		325,000
	Incremental product costs - current		(227,500)
	Tax benefit - Buildings and Equipment
	Tax depreciation method		Net capital cost - straight line 20 years
	Capital Cost		11,500,000
	Tax depreciation term		20
	Annual tax benefit		575,000
	Tax Rate
	Year 1 - 5		27%	Per current Government budgets
	Year 6 - 10		28%	Per current Government budgets