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H D Build a financial model, i TASSUMPTION BLOCK (dollar amounts in thousands) Cast of computer (inchading installati) Increase in receives Increase in inventories Increase in payables and accruals Increase in networking capital 30.000 $10.000 SS 300 $8.000 517.500 This should reflect the three digits found in your k Salvaye Depreciable basis Amal operating costs Tax Rate Discount rate weighted average cost of capital $5.587 380 000 571.500 400 5.79 Use the cost of capital (WACC) that you calculator $135.000 1 5103.000 20% S103.000 Project Increase to Sales MACRS Perce 5103.000 195 $96.000 129 $125.000 119 8 Cost of new computer ind installation) $80,000 Cost of new computer (ind installation) Increase in net working capital $80,000 $17.500 597,500 Net investment This is the net cash outflow at time zero 5 6 Year Sales revenue chat to expansion Additional operating conts (excluding depreciation) Depreciation (DEP) 0 11 12 EBIT (or operating income) Taxes on operating income 34 After-tax project operatiu income (OD 36 Operating cash flow (OLDEM) 37 3.8 39 40 41 42 43 44 5 Recovery of working capital Salvage serta Total non operating cash flows in year o Total Cash Flows Operating Non operating) Net Present Value of the Project Your model should give you a final NPV. 10 points 46 47 48 49 WACC Financial Model Projects Type here to search BE

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