| WACC | 4.27% | | | | Capital Budgeting Analysis |
| Life | 12 |
| | | Depreciation | $384.17 |
| Property, Plant and Equipment | 92,201 | | | | | Cash flows |
| Investment cost (PPE@10%) | 9,220.10 | | | | | EBIT | 1659.618 |
| Salvage value (5%@PPE) | 4610.05 | | | | | Depreciation Expense | $384.17 |
| EBIT (18 %@ project cost) | 1659.618 | | | | | Income Before Taxes | $1,275.45 |
| Tax Rate | 35% | | | | | Taxes | $446.41 |
| | | | | | | Net Income | $829.04 |
| | | | | | | Add Back Depreciation | $384.17 |
| | | | | | | Cash flow from operations | $1,213.21 |
| | Net Present Value | | | | | Payback Period | | | | Rate of Return |
| | Year | | Cash Inflow | PV Value | | Year | Cash flows | Balance |
| | 0 | -9,220 | | ($9,220.10) | | 0 | -9,220 | -9,220 | | Year | Annual Cash Inflows |
| | 1 | | $1,213.21 | $1,163.53 | | 1 | $1,213.21 | -8,007 | | 1 | $1,213.21 |
| | 2 | | $1,213.21 | $1,115.88 | | 2 | $1,213.21 | -6,794 | | 2 | $1,213.21 |
| | 3 | | $1,213.21 | $1,070.18 | | 3 | $1,213.21 | -5,580 | | 3 | $1,213.21 |
| | 4 | | $1,213.21 | $1,026.36 | | 4 | $1,213.21 | -4,367 | | 4 | $1,213.21 |
| | 5 | | $1,213.21 | $984.33 | | 5 | $1,213.21 | -3,154 | | 5 | $1,213.21 |
| | 6 | | $1,213.21 | $944.02 | | 6 | $1,213.21 | -1,941 | | 6 | $1,213.21 |
| | 7 | | $1,213.21 | $905.36 | | 7 | $1,213.21 | -728 | | 7 | $1,213.21 |
| | 8 | | $1,213.21 | $868.28 | | 8 | $1,213.21 | 486 | | 8 | $1,213.21 |
| | 9 | | $1,213.21 | $832.73 | | 9 | $1,213.21 | 1,699 | | 9 | $1,213.21 |
| | 10 | | $1,213.21 | $798.62 | | 10 | $1,213.21 | 2,912 | | 10 | $1,213.21 |
| | 11 | | $1,213.21 | $765.92 | | 11 | $1,213.21 | 4,125 | | 11 | $1,213.21 |
| | 12 | | $1,213.21 | $734.55 | | 12 | $1,213.21 | 5,338 | | 12 | $1,213.21 |
| | | | | | | | | 7.5997 | | Total Cash Inflows | $14,558.54 |
| | NPV | | | $1,989.66 | | Payback Period | | 7.5997 years | | Total Years | 12 |
| | | | | | | | | | | Average Annual Cash Flows | $1,213.21 |
| | | | | | | | | | | Cost of Investment | 9220.10 |
| | | | | | | | | | | Residual value | 4610.05 |
| | | | | | | | | | | Annual Depreciation Expenses | 384.17 |
| | | | | | | | | | | ARR | 8.99 |
swilson83
CapitalBudgetingAnalysis.xlsx
