Cash Flows From Working
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bus_401_wk_3_dq_1_example.docxIt may surprise you that there are cash flows associated with holding a job. Using the examples provided in Chapter 6, construct a simple cash flow statement and payback calculation for when your job expenses will be covered for employment you currently have or have had in the past. Include in your cash flow statement:
Expenses associated with working
Any initial investments
Taxes
Here is an outline
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Simple Cash Flow |
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Year 0 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
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Revenue |
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Gross Revenue |
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60,000 |
61,800 |
63,654 |
65,564 |
67,531 |
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($5,000 per month with 3% growth per year) |
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Expenses |
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New Clothes |
5,000 |
4,000 |
1,000 |
1,000 |
1,000 |
1,000 |
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New Car |
5,000 |
6,915 |
6,915 |
6,915 |
6,915 |
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Insurance |
500 |
500 |
500 |
500 |
500 |
500 |
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Fuel |
5,000 |
4,608 |
4,608 |
4,608 |
4,608 |
4,608 |
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Computer |
5,000 |
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Job Search |
200 |
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Meals |
1,000 |
5,000 |
5,000 |
5,000 |
5,000 |
5,000 |
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Depreciation |
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3,000 |
3,000 |
3,000 |
3,000 |
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Total Expenses |
21,700 |
24,023 |
21,023 |
21,023 |
21,023 |
11,108 |
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Profit |
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-21,700 |
35,977 |
40,777 |
42,631 |
44,541 |
56,423 |
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Tax (35%) |
-7,595 |
12,592 |
14,272 |
14,921 |
15,589 |
19,748 |
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Net Profit |
-14,105 |
23,385 |
26,505 |
27,710 |
28,951 |
36,675 |
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Cash Flow |
-14,105 |
26,385 |
29,505 |
30,710 |
31,951 |
36,675 |
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Straight Line Depreciation |
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Vehicle Cost |
25,000 |
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Salvage Value |
10,000 |
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15,000 |
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Depreciation 5 years |
3,000 |
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Sale of Asset (Car) in Year 5 |
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Initial Value |
25,000 |
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Year 1 loss @ 24% |
6,000 |
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Less 6% Year 2 |
1,140 |
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Less 6% Year 3 |
1,072 |
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Less 6% Year 4 |
1,007 |
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Year 5 Value |
15,781 |
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Amount Paid for Car |
25,000 |
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Less Loss in Value |
-15,781 |
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Book Value 5 years |
9,219 |
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Depreciated Amount |
12,000 |
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Loss/Gain |
2,781 |
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Gain x 28% |
1,367 |
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Payback Calculation |
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Time (Months) |
Initial Cost |
CFt |
Cumulative CFt's |
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0 |
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14,105 |
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1 |
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2,199 |
2,199 |
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2 |
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2,199 |
4,398 |
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3 |
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2,199 |
6,596 |
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4 |
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2,199 |
8,795 |
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5 |
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2,199 |
10,994 |
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6 |
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2,199 |
13,193 |
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7 |
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2,199 |
15,391 |
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8 |
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2,199 |
17,590 |
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9 |
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2,199 |
19,789 |
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10 |
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2,199 |
21,988 |
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11 |
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2,199 |
24,186 |
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12 |
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2,199 |
26,385 |
