ACC - Income Projection Week 1 Problem

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(1) A table with the following five lines:

Accounts receivable
Inventory
Accounts payable
NWC
Increase in NWC

(2) A table with the following eigth lines:

EBIT
Income taxes
Net income after taxes
Add back depreciation
Minus increase in NWC
Minus capital expenditures
Minus leasehold improvements
Net cash flow

I also have to find out the NPV. 

Note the following please:
•Capital Expenditures of $50,000 per year.
•Leasehold Improvements of $10,000 per year.
•DSO of 75 Days.
•Inventory Turnover of 12 times.
•Accounts Payable of 30 days.
•Depreciation is constant.
•The combined Federal and State Tax Rate is 40%.
•There are no additional financing expenses associated with the transaction.
After you have completed your cash flow forecast, calculate a Net Present Value assuming a discount rate of 15%.

    • 12 years ago
    ACC - Income Projection Week 1 Problem Solution
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