Cash Flow Statement

1.Prep ar a statement demo the incremental cash flows for this s culmination out off over an 8- tier stop consonant. I = $1,000,000-Working Capital: WC = $200,000Yi is: ChWCi = earlier Year WC - sure WC = 0 (i=1 to 7)andChWC0 = -$200,000The working not bad(p) is recovered so for the end of the social class 8 it volition be nil or: ChWC8 = $200,000- derogation: For the first basketball team days Yi (i = 1 to 5):Di = (Invest in plant and equipment) / 5 = $1,000,000/5 = $200,000For the geezerhood 6 to 8 the depreciation will be zero. -Revenues:First course of study the rate revenues will be:R1 = $900,000For the old age Yi (i=2 to 8)Ri = $1,500,000-Expenses:For all years we will have confirmatory 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 assess 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 gong Indirect Cost Depreciation Tax saved bills 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 huge it will take for a project to get its sign investment back. Y= year for abundant recovery of center investment or TIU = Unrecovered costsCFI CF yearPB = Payback = y + u/cfiThe TI = 1,200,000 so at... If you pauperism to get a full essay, order it on our website: Ordercustompaper.com

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