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Unit Sales 3200 3328 250 S 800,000 S 185 S Selling Price 256 | S 852,800 | S 190 $ 631,072 | S 242,253 S (20,524)| S Revenues Cost per Unit 592,000 S 181,649 | S 26,352 | S Costs Depreciation EBIT

Unit Sales 3200 3328 250 S 800,000 S 185 S Selling Price 256 | S 852,800 | S 190 $ 631,072 | S 242,253 S (20,524)| S Revenues Cost per Unit 592,000 S 181,649 | S 26,352 | S Costs Depreciation EBIT

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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How do you calculate NPV?

WACC is 10.10%

 

### Financial Analysis Table for Educational Purposes This table presents a financial analysis spanning over a five-year period, with Year 0 as the initial investment phase. It includes unit sales, revenues, costs, depreciation, cash flows, and net present values at a discount rate (WACC) of 10.10%. #### Table Breakdown: - **Year (Column Headers B-F):** Indicates the year of the analysis from 0 to 4. - **Unit Sales (Row 2):** Represents the number of units sold each year, starting at Year 1 with 3,200 units and increasing to 3,600 units by Year 4. - **Selling Price (Row 3):** The price per unit each year, beginning at $250 and increasing to $269 by Year 4. - **Revenues (Row 4):** Calculated as Unit Sales x Selling Price, starting at $800,000 and reaching $969,084 by Year 4. - **Cost per Unit (Row 5):** The cost to produce each unit, beginning at $185 and increasing to $199 by Year 4. - **Costs (Row 6):** Total cost each year, calculated as Unit Sales x Cost per Unit, initially $592,000 and increasing to $717,122 by Year 4. - **Depreciation (Row 7):** Depreciation costs which decline over time, starting at $181,649 in Year 1 to $40,385 in Year 4. - **EBIT (Earnings Before Interest and Taxes) (Row 8):** Revenues minus Costs and Depreciation, showing variations each year due to changes in Sales and Cost. - **Taxes @30% (Row 9):** Taxes applied on EBIT, at a constant rate of 30%. - **NOPAT (Net Operating Profit After Taxes) (Row 10):** EBIT minus Taxes, reflecting the net profit after taxes. - **Operating Cash Flow (Row 12):** NOPAT plus Depreciation, representing the cash generated from operations each year. - **Initial Investment (Row 13):** The initial cash outflow of $545,000 in Year 0. - **After Tax Salvage Value (Row 14):** The estimated salvage value of the asset after taxes in Year 4, $66,
Transcribed Image Text:### Financial Analysis Table for Educational Purposes This table presents a financial analysis spanning over a five-year period, with Year 0 as the initial investment phase. It includes unit sales, revenues, costs, depreciation, cash flows, and net present values at a discount rate (WACC) of 10.10%. #### Table Breakdown: - **Year (Column Headers B-F):** Indicates the year of the analysis from 0 to 4. - **Unit Sales (Row 2):** Represents the number of units sold each year, starting at Year 1 with 3,200 units and increasing to 3,600 units by Year 4. - **Selling Price (Row 3):** The price per unit each year, beginning at $250 and increasing to $269 by Year 4. - **Revenues (Row 4):** Calculated as Unit Sales x Selling Price, starting at $800,000 and reaching $969,084 by Year 4. - **Cost per Unit (Row 5):** The cost to produce each unit, beginning at $185 and increasing to $199 by Year 4. - **Costs (Row 6):** Total cost each year, calculated as Unit Sales x Cost per Unit, initially $592,000 and increasing to $717,122 by Year 4. - **Depreciation (Row 7):** Depreciation costs which decline over time, starting at $181,649 in Year 1 to $40,385 in Year 4. - **EBIT (Earnings Before Interest and Taxes) (Row 8):** Revenues minus Costs and Depreciation, showing variations each year due to changes in Sales and Cost. - **Taxes @30% (Row 9):** Taxes applied on EBIT, at a constant rate of 30%. - **NOPAT (Net Operating Profit After Taxes) (Row 10):** EBIT minus Taxes, reflecting the net profit after taxes. - **Operating Cash Flow (Row 12):** NOPAT plus Depreciation, representing the cash generated from operations each year. - **Initial Investment (Row 13):** The initial cash outflow of $545,000 in Year 0. - **After Tax Salvage Value (Row 14):** The estimated salvage value of the asset after taxes in Year 4, $66,
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