Managerial Accounting Excel Assignment

MBA6203-Case12-40-Template.xlsx

2015 Analysis

Bayside Chemical Company (2015 analysis)
	Predicted Cash Inflows (outflows) (A)	Year(s) of Cash Flows (B)	12% Present Value Factor (C)	Present Value of Cash Flows (A) x (C)
Initial investment
Fixed assets	(810,000)	0	1	$ (810,000)
Working capital	(100,000)	0	1	(100,000)
Operations
Annual taxable income w/o depreciation	310,000	1 thru 5	3.60478	1,117,482
Taxes on income ($310,000 x 0.40)	(124,000)	1 thru 5	3.60478	(446,993)
Depreciation tax shield	64,800	1 thru 5	3.60478	233,590
Disinvestment
Site restoration	(80,000)	5	0.56743	(45,394)
Tax shield of restoration ($80,0000 x 0.40)	32,000	5	0.56743	18,158
Working capital	100,000	5	0.56743	56,743
Net present value of all cash flows				$ 23,586
Taxe Rate	40%
Project Life (years)	5

Present Value of Selling Plant at 12/31/2017
Cash from sale of plant			250,000
Tax shield of loss on sale:
Selling Price
Book Value
Loss on sale
Tax shield
Proceeds from selling plant			250,000
Present Value of Additional Investment
	Predicted Cash Inflows (outflows) (A)	Year(s) of Cash Flows (B)	12% Present Value Factor (C)	Present Value of Cash Flows (A) x (C)
Initial investment
Fixed assets		0	1
Operations
Annual taxable income w/o depreciation
Taxes on income ($310,000 x 0.40)
Depreciation tax shield - original
Depreciation tax shield - additional
Disinvestment
Site restoration
Tax shield of restoration ($80,0000 x 0.40)
Working capital
Net present value of all cash flows				$ 6
***With the exception of Year(s) of Cash Flows and 12% Present Value Factor, you should enter formulas with cell references - NO HARD-KEYED NUMBERS