| Base price | $80,000 |
| Additional modification costs | $20,000 |
| Before-tax salvage proceeds | $40,000 |
| Change in NOWC | $12,000 |
| Before-tax labor cost savings | $73,000 |
| WACC | 13.00% |
| Tax rate | 40.00% |
| Yr. 0 | Yr. 1 | Yr. 2 | Yr. 3 |
| Depreciation rates | 0.33 | 0.45 | 0.15 |
| Yr. 0 | Yr. 1 | Yr. 2 | Yr. 3 |
| Base price |
| Modification costs |
| NOWC |
| Before-tax labor cost savings | $73,000.00 | $73,000.00 | $73,000.00 |
| Depreciation |
| Operating income |
| Taxes |
| After-tax operating income |
| Add back depreciation | $0.00 | $0.00 | $0.00 |
| Operating cash flows |
| Termination cash flows |
| Before-tax salvage proceeds | $40,000.00 |
| Tax on salvage value |
| NOWC recapture | $12,000.00 |
| Project cash flows |
| NPV |
| Project acceptance? |
| Formulas |
| Yr. 0 | Yr. 1 | Yr. 2 | Yr. 3 |
| Base price | ERROR:#N/A |
| Modification costs | ERROR:#N/A |
| NOWC | ERROR:#N/A |
| Before-tax labor cost savings | $73,000.00 | $73,000.00 | $73,000.00 |
| Depreciation | ERROR:#N/A | ERROR:#N/A | ERROR:#N/A |
| Operating income | ERROR:#N/A | ERROR:#N/A | ERROR:#N/A |
| Taxes | ERROR:#N/A | ERROR:#N/A | ERROR:#N/A |
| After-tax operating income | ERROR:#N/A | ERROR:#N/A | ERROR:#N/A |
| Add back depreciation | ERROR:#N/A | ERROR:#N/A | ERROR:#N/A |
| Operating cash flows | ERROR:#N/A | ERROR:#N/A | ERROR:#N/A |
| Termination cash flows |
| Before-tax salvage proceeds | $40,000.00 |
| Tax on salvage value | ERROR:#N/A |
| NOWC recapture | $12,000.00 |
| Project cash flows | ERROR:#N/A | ERROR:#N/A | ERROR:#N/A | ERROR:#N/A |
| NPV | ERROR:#N/A |
| Project acceptance? | ERROR:#N/A |
echidester
excelstop1.xlsx
