Cash Flow Statement

1.Prep be a statement showing the incremental cash flows for this dismount off over an 8- stratum intent. I = $1,000,000-Working Capital: WC = $200,000Yi is: ChWCi = front Year WC - sure WC = 0 (i=1 to 7)andChWC0 = -$200,000The working detonating device is recovered so for the end of the social class 8 it go away be zipper or: ChWC8 = $200,000-Depreciation: For the first flipper days Yi (i = 1 to 5):Di = (Invest in plant and equipment) / 5 = $1,000,000/5 = $200,000For the old age 6 to 8 the depreciation will be zero. -Revenues:First year the evaluate revenues will be:R1 = $900,000For the years Yi (i=2 to 8)Ri = $1,500,000-Expenses:For all years we will have verifying incremental costs of $80,000For each(prenominal) year the direct costs are 0.55*RiFor each year Yi (i=1 to 8):Ei = $80,000 + 0.55*Ri then:E1 = $80,000 + 0.55*$950,000 = $602,500For i=2 to 8:Ei = $80,000 + 0.55*$1,500,000 = $905,000-Taxes:The firms fringy tax rate is 35%, taxes will be:Ti = T * (Ri - Ei - Di) with T = 0.35 (i=1 to 8)T1 = 0.35*($950,000-$602500-$200,000) = $51625For i=2 to 5Ti = 0.35*($1,500,000-$905,000-$200,000) = $138250For i=6 to 8Ti = 0.

35*($1,500,000-$905,000-$0) = $208250Year Sales level bell Indirect Cost Depreciation Tax salvage Cash Flow0 -1,200,000 -1,200,0001 950,000 522,500 80,000 200,000 70,000 236,5002 1,500,000 825,000 80,000 200,000 70,000 385,0003 1,500,000 825,000 80,000 200,000 70,000 385,0004 1,500,000 825,000 80,000 200,000 70,000 385,0005 1,500,000 825,000 80,000 200,000 70,000 385,0006 1,500,000 825,000 80,000 357,0007 1,500,000 825,000 80,000 357,0008 1,700,000 825,000 80,000 477,0002.Calculate th e Payback time period (P/B) and the NPV for! the project. The payback period is how long it will take for a project to pack its initial investment back. Y= year for full recuperation of total investment or TIU = Unrecovered costsCFI CF yearPB = Payback = y + u/cfiThe TI = 1,200,000 so at... If you indigence to get a full essay, order it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay