ProjectYear-1Year-2Year-3Year-4Year-5Year-6Year-7Year-8 Cost of Capital (borrowing)12.00% Cost of Truck$200,000 Cost of additional equiment attached to truck$15,000 Tax rate 35% Annual Before Tax & Depreciation Truck
jose.a.eartvnhz9| Project | Year-1 | Year-2 | Year-3 | Year-4 | Year-5 | Year-6 | Year-7 | Year-8 | |||
| Cost of Capital (borrowing) | 12.00% | ||||||||||
| Cost of Truck | $200,000 | ||||||||||
| Cost of additional equiment attached to truck | $15,000 | ||||||||||
| Tax rate | 35% | ||||||||||
| Annual Before Tax & Depreciation Truck Projected Earnings → | $70,000 | $70,000 | $65,000 | $60,000 | $55,000 | $50,000 | $40,000 | $30,000 | |||
| Depreciation Percentage Rate (MACRS)* | 20.0% | 32.0% | 19.2% | 11.5% | 11.5% | 5.8% | 0.0% | 0.0% | |||
| * The proposed truck has an estimated economic life of seven years but will be treated as a five-year MACRS property for depreciation purposes. | |||||||||||
| Calculate the following -- light yellow highlighted cells need to be completed | |||||||||||
| Year-0 | Year-1 | Year-2 | Year-3 | Year-4 | Year-5 | Year-6 | Year-7 | Year-8 | |||
| Annual Before Tax & Depreciation Truck Projected Earnings → | |||||||||||
| Depreciation Expense | 12,470.00 | ||||||||||
| Annual Before Tax Truck Projected Earnings → | |||||||||||
| Tax | 9,450.00 | ||||||||||
| Annual Projected Truck Earnings → | |||||||||||
| Depreciation to add back | |||||||||||
| Projected Truck Net Cash Flow | $56,698.00 | ||||||||||
| Decision Criteria: | |||||||||||
| Pay Back Period | Years | ||||||||||
| Discounted Pay Back Period (DPB)** | Years | ||||||||||
| Net Present Value | |||||||||||
| Internal Rate of Return | |||||||||||
| Profitability Index | |||||||||||
| Discounted Cash Flow Needed for DPB Calc. | |||||||||||
| Recommendations: | |||||||||||
10 years ago
999999.99
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