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Fin 370 Week 4 Calculating Cash Flow Problem Set

• Date Submitted: 05/05/2016 09:25 PM
• Flesch-Kincaid Score: 60.9
• Words: 317
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FIN 370 Week 4 Calculating Cash Flow problem set

Data:
Cost of Capital (borrowing)
Cost of Automobile
Cost of additional equiment atached to tu
Tax rate
Annual Before Tax Cash flows

Project
12.00%
\$200,000
\$15,000
35%
Year-1
Year-2
Year-3
Year-4
Year-5
Year-6
Year-7
Year-8
\$70,000
Process Area:
Cash Outflows
Cost of Equipment
Total Investment Outlays
\$65,000
\$60,000
\$55,000
\$50,000
\$40,000
20.0%
Depreciaiton Rate (MACRS)
\$70,000
Given in problem
Given in problem
Given in problem
Given in problem
\$30,000 Given in problem
32.0%
19.2%
11.5%
11.5%
5.8%
0.0%
0.0% Given in problem
Year – 0
\$215,000
\$215,000
Cash Inflows:
Net Operating Cash flows
Depreciation
Earnings before interest and taxes
Taxes
Earning after taxes
Net Operating Cash flows
Year-0
Given in problem
Given in problem
Year-1
Year-2
Year-3
Year-4
Year-5
Year-6
Year-7
Year-8
Take cash flows from years 0-8 (including initial outlay)
Initial investment X depreciation rate
Cash flows minus depreciation
Earnings X tax rate
Earnings before taxes minus taxes
Earning after taxes + depreciation
Pay Back Period
0
0
0
0
0
0
0
0
0
Pay Back Period divided by Net Operating Cash Flows
Discounted Operating Cash flows
Decision Criteria:
Pay Back Period
Discounted Pay Back Period
Net Present Value
Internal Rate of Return
Profitability Index
0
0
>8 Years
>8 Years
0
0
#DIV/0!
Years
Years
\$0.00 = Reject
Err:523
Err:523
#DIV/0!
#DIV/0!
0
0
#DIV/0!
0
0
#DIV/0!
0
0
#DIV/0!
0
0
#DIV/0!
0
0
#DIV/0!
0
0
#DIV/0!
0
0
#DIV/0!