Question: what is the present value for each year ? Assumptions: Total operating costs as a percentage of revenues 82% Tax rate for PepsiCo................................................................................. 22.00% Continuing
what is the present value for each year ?
| Assumptions: | |||||||||||
| Total operating costs as a percentage of revenues | 82% | ||||||||||
| Tax rate for PepsiCo................................................................................. | 22.00% | ||||||||||
| Continuing value assumption......................................................................... | 4 | ||||||||||
| present vau;e | 7.90% | ||||||||||
| Acquisition stage cash flow: | |||||||||||
| Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| Research and development costs | $ (5,000,000) | ||||||||||
| Product launch and promotion costs | $ (40,000,000) | $ (20,000,000) | $ (10,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) |
| Capacity, warehousing, equipment costs | $ (50,000,000) | ||||||||||
| Upfront inventory costs | $ (21,385,800) | ||||||||||
| Total Acquisitions Stage Costs | $ (116,385,800) | $ (20,000,000) | $ (10,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) | $ (5,000,000) |
| Operating stage cash flow: | |||||||||||
| Year | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 |
| Additional revenues expected from the sale of the new product: | 100,000,000 | 250,000,000 | 450,000,000 | 490,500,000 | 534,645,000 | 582,763,050 | 635,211,725 | 673,324,428 | 713,723,894 | 756,547,327 | |
| Total operating costs as a percentage of revenues | 82% | 82% | 82% | 82% | 82% | 82% | 82% | 82% | 82% | 82% | |
| Total operating costs | $ (82,000,000) | $ (205,000,000) | $ (369,000,000) | $ (402,210,000) | $ (438,408,900) | $ (477,865,701) | $ (520,873,614) | $ (552,126,031) | $ (585,253,593) | $ (620,368,808) | |
| Operating cash flows | $ 18,000,000 | $ 45,000,000 | $ 81,000,000 | $ 88,290,000 | $ 96,236,100 | $ 104,897,349 | $ 114,338,110 | $ 121,198,397 | $ 128,470,301 | $ 136,178,519 | |
| Taxes at 22% (from PepsiCo's annual report) | $ (3,960,000) | $ (9,900,000) | $ (17,820,000) | $ (19,423,800) | $ (21,171,942) | $ (23,077,417) | $ (25,154,384) | $ (26,663,647) | $ (28,263,466) | $ (29,959,274) | |
| Net operating income | $ 14,040,000 | $ 35,100,000 | $ 63,180,000 | $ 68,866,200 | $ 75,064,158 | $ 81,819,932 | $ 89,183,726 | $ 94,534,750 | $ 100,206,835 | $ 106,219,245 | |
| Disposition stage cash flow: | $ 424,876,979 | ||||||||||
| Total cash flow | $ (116,385,800) | $ (5,960,000) | $ 25,100,000 | $ 58,180,000 | $ 63,866,200 | $ 70,064,158 | $ 76,819,932 | $ 84,183,726 | $ 89,534,750 | $ 95,206,835 | $ 526,096,224 |
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