Cash Flow Statement

1.Prep are a statement presentation the incremental cash flows for this cast off over an 8- horizontal surface fulfilment. I = $1,000,000-Working Capital: WC = $200,000Yi is: ChWCi = forward Year WC - sure WC = 0 (i=1 to 7)andChWC0 = -$200,000The working smashing is recovered so for the block up of the social class 8 it ordain be null or: ChWC8 = $200,000- derogation: For the first fivesome days Yi (i = 1 to 5):Di = (Invest in plant and equipment) / 5 = $1,000,000/5 = $200,000For the age 6 to 8 the depreciation will be zero. -Revenues:First family the pass judgment revenues will be:R1 = $900,000For the stratums Yi (i=2 to 8)Ri = $1,500,000-Expenses:For all years we will have collateral 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 measure 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 Direct bell Indirect Cost Depreciation Tax saved specie 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 the Payback time period (P/B) and the NPV for the project. The payback period is how coarse it will take for a project to get its sign investment back. Y= year for unspoilt recovery of keep down investment or TIU = Unrecovered costsCFI CF yearPB = Payback = y + u/cfiThe TI = 1,200,000 so at... If you penury to get a full essay, order it on our website: Orderessay

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