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FNT1 Task 2 319.1.3-01-10, 2.1-04, 2.5-05 Capital Budgeting Student Template
Revised May 8, 2011
Student Name: A Sobala Initial Investment Work Cap Cash 1 Cash 2 Cash 3 Cash 4 Exp 1 Exp 2 Exp 3 Exp 4 Tax Rate Restoration 2,700,000
X 3,000,000 210,000 3,200,000 3,600,000 3,800,000 3,700,000 2,500,000 2,800,000 3,200,000 2,900,000 30% 120,000 2,800,000
Enter your first initial and last name in the fields above. A 3,250,000 220,000 3,100,000 3,400,000 3,600,000 3,240,000 2,400,000 2,600,000 2,700,000 2,500,000 25% 140,000 2,580,000
B 3,000,000 200,000 3,000,000 3,200,000 3,400,000 3,800,000 2,400,000 2,400,000 2,650,000 2,800,000 28% 120,000 2,480,000
Your Task 2 Data C 2,940,000 250,000 3,400,000 3,500,000 3,700,000 3,470,000 2,800,000 2,850,000 2,900,000 2,500,000 22% 140,000 2,500,000
Years 1 & 2 Years 3 & 4 Years 5 & 6 Years 7 & 8 D 2,900,000 180,000 2,940,000 3,160,000 3,240,000 3,600,000 2,200,000 2,500,000 2,600,000 2,600,000 30% 160,000 2,700,000
Estimated Cash Receipts from tool sales each year. 3,100,000 3,400,000 3,600,000 3,240,000 E 2,850,000 200,000 3,200,000 3,600,000 3,800,000 3,600,000 2,500,000 2,800,000 3,400,000 2,600,000 25% 130,000 2,600,000
Estimated Cash Expenses for operations each year 2,400,000 2,600,000 2,700,000 2,500,000 F 2,900,000 300,000 3,170,000 3,240,000 3,470,000 3,930,000 2,400,000 2,500,000 2,750,000 3,300,000 32% 150,000 2,570,000
Initial Investment for equipment, etc. 3,250,000 G 2,800,000 180,000 3,000,000 3,200,000 3,600,000 3,470,000 2,300,000 2,600,000 2,800,000 2,500,000 32% 160,000 2,570,000
Marginal Tax Rate 25% H 2,820,000 180,000 3,000,000 3,200,000 3,600,000 3,800,000 2,300,000 2,600,000 2,800,000 2,800,000 32% 160,000 2,140,000
Restoration at the end of 8 years 140,000 I 2,450,000 260,000 3,750,000 3,860,000 3,930,000 3,240,000 3,100,000 3,300,000 3,400,000 2,500,000 30% 190,000 2,600,000
Working Capital required 220,000 J 3,100,000 300,000 3,170,000 3,240,000 3,470,000 3,600,000 2,400,000 2,500,000 2,750,000 2,600,000 32% 150,000 2,700,000
K 2,840,000 200,000 3,200,000 3,600,000 3,800,000 3,700,000 2,500,000 2,800,000 3,400,000 2,850,000 25% 130,000 2,500,000
L 2,950,000 180,000 2,940,000 3,260,000 3,240,000 3,470,000 2,200,000 2,500,000 2,600,000 2,500,000 30% 160,000 2,800,000
Entrepreneur D M 3,400,000 220,000 3,100,000 3,400,000 3,600,000 3,800,000 2,400,000 2,600,000 2,700,000 2,700,000 25% 140,000 2,480,000
Net Cash Flow per Year N 2,800,000 250,000 3,400,000 3,500,000 3,700,000 3,240,000 2,800,000 2,850,000 2,900,000 2,500,000 22% 140,000 2,600,000
Years 1 & 2 Years 3 & 4 Years 5 & 6 Years 7 & 8 O 2,900,000 300,000 3,170,000 3,240,000 3,470,000 3,930,000 2,400,000 2,500,000 2,750,000 3,300,000 32% 150,000 2,700,000
Expected annual sales of new product P 2,840,000 225,000 3,200,000 3,600,000 3,800,000 3,700,000 2,500,000 2,800,000 3,400,000 2,850,000 26% 130,000 2,500,000
Q 2,850,000 180,000 2,940,000 3,160,000 3,240,000 3,600,000 2,200,000 2,500,000 2,600,000 2,600,000 30% 160,000 2,140,000
Expected annual costs of new product R 2,600,000 240,000 3,750,000 3,860,000 3,930,000 3,700,000 3,100,000 3,250,000 3,300,000 2,650,000 30% 190,000 2,140,000
Cash expenses S 2,800,000 260,000 3,750,000 3,860,000 3,930,000 3,470,000 3,100,000 3,000,000 3,400,000 2,500,000 30% 190,000 2,800,000
Depreciation expense T 2,840,000 225,000 3,200,000 3,600,000 3,800,000 3,700,000 2,500,000 2,800,000 3,400,000 2,950,000 28% 160,000 2,480,000
Income before taxes U 2,900,000 250,000 3,400,000 3,500,000 3,700,000 3,800,000 2,800,000 2,850,000 2,900,000 2,800,000 22% 140,000 2,600,000
Income tax at marginal rate V 2,800,000 300,000 3,170,000 3,240,000 3,470,000 3,400,000 2,400,000 2,500,000 2,750,000 2,400,000 32% 150,000 2,580,000
Net income W 2,900,000 200,000 3,000,000 3,200,000 3,400,000 3,400,000 2,400,000 2,400,000 2,650,000 2,400,000 28% 120,000 2,700,000
Net annual cash flow for years shown Y 2,750,000 200,000 3,100,000 3,200,000 3,400,000 3,360,000 2,600,000 2,500,000 2,500,000 2,600,000 28% 120,000 2,580,000
Z 2,750,000 200,000 3,000,000 3,200,000 3,200,000 3,400,000 2,400,000 2,400,000 2,650,000 2,500,000 28% 120,000 2,580,000
Net Present Value:
12% Present
Cash Flows PV Factors Value
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Working Capital return
Salvage return
Building restoration costs
Total
Investment
Net Present Value
GRADERS: To provide for factor rounding, please allow plus or minus $2000 on this net present value solution.
Internal Rate of Return:
Cash Flows
Investment
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8 + Working Capital + Salvage - Remodeling
Internal Rate of Return using Excel
Payback Period: Time for Cash
Net Flow to Payback
Cash Flow Investment
Investment
Year 1 State your answer below in years and full months rounding up as necessary.
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Years Months
Accounting Rate of Return *Working Capital requirements are not part of this calculation.

$35000 $160,000*

$300,000 $105,000

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