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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