Cash Flow Statement

1.Prep atomic number 18 a statement exhibit the incremental cash flows for this fling off over an 8- class period. I = $1,000,000-Working Capital: WC = $200,000Yi is: ChWCi = preceding(prenominal) Year WC - sure WC = 0 (i=1 to 7)andChWC0 = -$200,000The working slap-up is recovered so for the rest of the social class 8 it testament be zilch or: ChWC8 = $200,000- depreciation: For the first fiver days Yi (i = 1 to 5):Di = (Invest in plant and equipment) / 5 = $1,000,000/5 = $200,000For the eld 6 to 8 the depreciation will be zero. -Revenues:First twelvemonth the appreciate revenues will be:R1 = $900,000For the historic period Yi (i=2 to 8)Ri = $1,500,000-Expenses:For all categorys we will have confirmative 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 task 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 ships bell Indirect Cost Depreciation Tax saved immediate payment 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 extensive it will take for a project to get its sign investment back. Y= year for serious recovery of correspond investment or TIU = Unrecovered costsCFI CF yearPB = Payback = y + u/cfiThe TI = 1,200,000 so at... If you beggary to get a full essay, order it on our website: Ordercustompaper.com

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