Analysis of an Expansion Project Part 1. Inputs and Key Results Inputs Equipment cost Salvage value,...
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Analysis of an Expansion Project Part 1. Inputs and Key Results Inputs Equipment cost Salvage value, equipment, Year 4 Opportunity cost Externalities (cannibalization) Units sold, Year 1 Annual change in units sold, after Year 1 Sales price per unit, Year 1 Annual change in sales price, after Year 1 Variable cost per unit (VC), Year 1 Annual change in VC, after Year 1 Nonvariable cost (Non-VC), Year 1 Annual change in Non-VC, after Year 1 Project WACC Tax rate Working capital as % of next year's sales Depreciable basis: Base-Case $3,400 $300 $0 $0 550 4.00% $11.60 2.00% $6.00 2.00% $2,000 2.00% 10.00% 40.00% 12.65% Accelerated Depreciation Year Rate 1 33% NPV IRR MIRR Key Results PI Payback 2 45% 3 15% 4 7% Analysis of an Expansion Project Part 1. Inputs and Key Results Inputs Equipment cost Salvage value, equipment, Year 4 Opportunity cost Externalities (cannibalization) Units sold, Year 1 Annual change in units sold, after Year 1 Sales price per unit, Year 1 Annual change in sales price, after Year 1 Variable cost per unit (VC), Year 1 Annual change in VC, after Year 1 Nonvariable cost (Non-VC), Year 1 Annual change in Non-VC, after Year 1 Project WACC Tax rate Working capital as % of next year's sales Depreciable basis: Base-Case $3,400 $300 $0 $0 550 4.00% $11.60 2.00% $6.00 2.00% $2,000 2.00% 10.00% 40.00% 12.65% Accelerated Depreciation Year Rate 1 33% NPV IRR MIRR Key Results PI Payback 2 45% 3 15% 4 7%
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First Year 3400 300 x 33 837 Second Year 3400 300 x 45 1215 Third Year 3400 300 x 15 405 Ye... View the full answer
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