| | Case #4 - Conch Republic Electronics | | | | | | | | | | | | | | | | Input Area: | | | | | | | | | | | | | | | | | | | | | | | | | | | Equipment | $15,000,000 | | | | | | | | Salvage value | $3,000,000 | | | | | | | | R&D | $750,000 | sunk cost | | | | | | | Marketing study | $200,000 | sunk cost | | | | | | | | | | | | | | | | | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | | | | Sales(units) | 70,000 | 80,000 | 100,000 | 85,000 | 75,000 | | | | Depreciation rate | 14.29% | 24.49% | 17.49% | 12.49% | 8.93% | | | | Sales of old PDA | 80,000 | 60,000 | | | | | | …show more content…

| Fixed costs | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | 3,000,000 | | | | Dep | 2,143,500 | 3,673,500 | 2,623,500 | 1,873,500 | 1,339,500 | | | | EBT | $3,156,500 | $3,766,500 | $11,776,500 | $9,916,500 | $8,710,500 | | | | Tax | 1,104,775 | 1,318,275 | 4,121,775 | 3,470,775 | 3,048,675 | | | | NI | $2,051,725 | $2,448,225 | $7,654,725 | $6,445,725 | $5,661,825 | | | | +Dep | 2,143,500 | 3,673,500 | 2,623,500 | 1,873,500 | 1,339,500 | | | | OCF | $4,195,225 | $6,121,725 | $10,278,225 | $8,319,225 | $7,001,325 | | | | | | | | | | | | | NWC | | | | | | | | | Beg | $0 | $2,660,000 | $3,260,000 | $5,200,000 | $4,420,000 | | | | End | 2,660,000 | 3,260,000 | 5,200,000 | 4,420,000 | 0 | | | | NWC CF | ($2,660,000) | ($600,000) | ($1,940,000) | $780,000 | $4,420,000 | | | | | | | | | | | | | Net CF | $1,535,225 | $5,521,725 | $8,338,225 | $9,099,225 | $11,421,325 | | | | | | | | | | | | | Salvage | | | | | | | | | BV of equipment | $3,346,500 | | | | | | | | Taxes | 121,275 | | | | | | | | Salvage CF | $3,121,275 | | | | | | | | | | | | | | | | | Net CF | Time | | | | | | | | | 0 | ($15,000,000) | | | | | | | | 1 | $1,535,225 | | | | | | | | 2 |