Chapter 9
Input Area:
Equipment 34,500,000$
Salvage value 5,500,000$
R&D 750,000$ sunk cost
Marketing study 200,000$ sunk cost
Year 1 Year 2 Year 3 Year 4 Year 5
Sales(units) 64,000 106,000 87,000 78,000 54,000
Depreciation rate 14.29% 24.49% 17.49% 12.49% 8.93%
Output Area:
Year 1 Year 2 Year 3 Year 4 Year 5
Sales $31,040,000 $51,410,000 $42,195,000 $37,830,000 $26,190,000
VC 13,120,000 21,730,000 17,835,000 15,990,000 11,070,000
Fixed costs 5,100,000 5,100,000 5,100,000 5,100,000 5,100,000
Dep 4,930,050 8,449,050 6,034,050 4,309,050 3,080,850
EBT $7,889,950 $16,130,950 $13,225,950 $12,430,950 $6,939,150
Net CF $3,850,518 $14,860,168 $16,473,918 $13,262,168 $15,157,298
Salvage
BV of equipment $7,696,950
Taxes 768,933
Salvage CF $6,268,933
Net CF Time
0(34,500,000)$
13,850,518
214,860,168
316,473,918
Conch Republic Electronics
413,262,168
521,426,230
Sensitivity to change in price
Sales Year 1 Year 2 Year 3 Year 4 Year 5
Sales $31,680,000 $52,470,000 $43,065,000 $38,610,000 $26,730,000
VC 13,120,000 21,730,000 17,835,000 15,990,000 11,070,000
Fixed costs 5,100,000 5,100,000 5,100,000 5,100,000 5,100,000
Dep 4,930,050 8,449,050 6,034,050 4,309,050 3,080,850
EBT $8,529,950 $17,190,950 $14,095,950 $13,210,950 $7,479,150
Tax 2,985,483 6,016,833 4,933,583 4,623,833 2,617,703
Net CF $4,138,518 $15,465,168 $17,077,418 $13,787,168 $15,664,298
Salvage
BV of equipment $7,696,950
Taxes 768,933
Salvage CF $6,268,933
Sensitivity to change in quantity
Sales Year 1 Year 2 Year 3 Year 4 Year 5
Sales $31,088,500 $51,458,500 $42,243,500 $37,878,500 $26,238,500
VC 13,140,500 21,750,500 17,855,500 16,010,500 11,090,500
Fixed costs 5,100,000 5,100,000 5,100,000 5,100,000 5,100,000
Dep 4,930,050 8,449,050 6,034,050 4,309,050 3,080,850
EBT $7,917,950 $16,158,950 $13,253,950 $12,458,950 $6,967,150
Tax 2,771,283 5,655,633 4,638,883 4,360,633 2,438,503
NWC
Beg $0 $6,217,700 $10,291,700 $8,448,700 $7,575,700
End 6,217,700 10,291,700 8,448,700 7,575,700 0
NWC CF ($6,217,700) ($4,074,000) $1,843,000 $873,000 $7,575,700
Net CF $3,859,018 $14,878,368 $16,492,118 $13,280,368 $15,185,198
Salvage
BV of equipment $7,696,950
Taxes 768,933
Salvage CF $6,268,933