80.2K

Verified Solution

Link Copied!

PLEASE CALCULATE THE SALVAGE VALUE USING EXCEL! I NEED TO CHECK MY WORK.

Year 1 75,000 Year 2 100,000 Year 3 130,000 Year 4 160,000 Year 5 180,000 Units Sales Equipment Cost Salvage value 75,000,000 4,500,000 Units Price Variable cost (per unit) Fixed costs (per year) 650 400 5,500,000 Tax rate Initial NWC investment NWC (% of sales 21% 2,000,000 15% Required return Required Payback Period (years) Required Discounted Payback Period (years) 12% 3 Year 5 Year 6 Year 7 Year 8 MACRS Schedule 3-year 5-year 7-year Year 1 33.33% 20.00% 14.29% Year 2 44.45% 32.00% 24.49% Year 3 14.81% 19.20% 17.49% Year 4 7.41% 11.52% 12.49% 11.52% 5.76% 8.93% 8.92% 8.93% 4.46% Pro Forma Income Statements Year Revenues Variable costs Fixed costs Depreciation EBIT Taxes (21%) Net income OCF 1 48,750,000 30,000,000 5,500,000 10,717,500 2,532,500 531,825 2,000,675 12,718,175 2 65,000,000 40,000,000 5,500,000 18,367,500 1,132,500 237,825 894,675 19,262,175 3 84,500,000 52,000,000 5,500,000 13,117,500 13,882,500 2,915,325 10,967,175 24,084,675 4 104,000,000 64,000,000 5,500,000 9,367,500 25,132,500 5,277,825 19,854,675 29,222,175 5 117,000,000 72,000,000 5,500,000 6,697,500 32,802,500 6,888,525 25,913,975 32,611,475 0 15,600,000 2,000,000 (2,000,000) 2,000,000 7,312,500 (5,312,500) 3 9,750,000 12,675,000 (2,925,000) 7,312,500 9,750,000 (2,437,500) 12,675,000 15,600,000 (2,925,000) 15,600,000 Net Working Capital Year Initial NWC Ending NWC NWC cash flow Salvage Value Market value of salvage Book value of salvage Taxes on sale Aftertax salvage value: 4,500,000

Answer & Explanation Solved by verified expert

See Answer