Excl project

capital_budgeting_template_1_1.xlsx

Blank Format

Gamma Inc.
Assumptions:
Tax Rate
Old machine purchased for
Old Machine - Book Value
Initial Investment
Installed cost of new asset
Cost of the new machine
Installation costs
Total cost of new machine
After-tax proceeds from sale of old asset
Proceeds from sale of existing machine
Tax on sale of existing machine
Total after-tax proceeds from sale
Increase in net working capital
Initial investment
Terminal CF
After-tax proceeds from sale of new asset
Proceeds from sale of new asset				BV of "new" machine at end of project
Tax on sale of new asset
Total after tax proceeds—sale of new asset
Change in net working capital
Terminal cash flow
		MACRS Yr 1	MACRS Yr 2	MACRS Yr 3	MACRS Yr 4	MACRS Yr 5	MACRS Yr 6
CF for New Machine		20%	32%	19%	12%	12%	5%
YEAR	0	1	2	3	4	5	6
EBIT Improvement							- 0
Depreciation							- 0
Net Profit before Tax							- 0
Tax (@40%)							- 0
Net Profit After Tax							- 0
Operating Cash Flow							- 0
CF for Old Machine
YEAR	0	1	2	3	4	5	6
EBIT Improvement (none for business-as-usual)		- 0	- 0	- 0	- 0	- 0
Depreciation							- 0
Net Profit before Tax							- 0
Tax (@40%)							- 0
Net Profit After Tax							- 0
Operating Cash Flow							- 0
Incremental CF
YEAR	0	1	2	3	4	5	6
New Machine CF							- 0
Old Machine CF							- 0
Incremental CF (Difference)							- 0
Project Cash Flows (to be discounted)
	Hurdle Rate
YEAR	0	1	2	3	4	5	6
Initial Investment
Incremental CF							The equipment was sold at the end of Year 5, so Y6 Depreciation is not relevant
Terminal Value
Total CF							- 0
PV							- 0
NPV (Sum of PVs, less Initial Investment)
NPV (using formula)
IRR
PBP

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