Assessment

Sheet1

PROJECT A
purchase price	rate of reduction	period	resultant	cash in	cash out
$10million	5% per yr	8yrs	$10.50	$500,000
			$11m
before the sales			$11.5m
initial cost		tax	$12m
60%= $6million		25%=2.5million	$12.5m	$10-$8=$2million
					$2.5million

10.5 0 0 0 0

Sheet2

PROJECT B
expansion rate	period	resultant	cash in		cash out
5% per year	5 yrs	$10.5million			tax 30%=$11.25
		$11m
		$11.5m
		$12m
		$12.5m	$12.5million
annual sales on previous year
$20million
startup cost	upfront
$7million	$1million
total
$28millin
interest after 5 years		capital after 5 years
$1m8*5=$5m		5m plus 20m=$25m
			$37.5million
total earning
$37.5-$11.25=$26.25
rate of return is 12%

$10.5million $11m $11.5m $12m $12.5m

Sheet3

PROJECT C
capital	rate	period	amount after 1st year		after six years	cash in
$2million	15% increase	1 yr	$2.3m	$3.8m+$2=$5.8m		$14million
		2nd yrs	$2.6m
		3rd yr	$2.9m
		4th yr	$3.2m
		5th yr	$3.5m
		6th yr	$3.8m
annual sale previous year
$20million
tax
25%

6th yr $2.3m $2.6m $2.9m $3.2m $3.5m 0 6th yr $2.3m $2.6m $2.9m $3.2m $3.5m 0 6th yr $2.3m $2.6m $2.9m $3.2m $3.5m 0