Solution
Neenisha answered on
May 28 2021
If Statement Ex
Positive Negative
Version 1 Version2 Cutoffs Percentage Number Answe
Year 1 1.5% <10 10%
Year 2 -3.0% 10 20%
Year 3 0.7% >10 30%
Year 4 0.0%
Sheet1
1
0 1 2 3 4 5 Tax Rate 40.00%
Cost (2,900,000) MACR Depreciation 5
Revenue before tax 2,080,000 2,080,000 2,080,000 2,080,000 2,080,000 MACR Depreciation
Operating expenses (775,000) (775,000) (775,000) (775,000) (775,000) Year 3 Year 5 yea
Depreciation (580,000) (928,000) (556,800) (334,080) (334,080)
Cash Flow before tax 725,000 377,000 748,200 970,920 970,920 1 33.33% 20.00%
Cash Flow after tax 435,000 226,200 448,920 582,552 582,552 2 44.45% 32.00%
Depreciation 580,000 928,000 556,800 334,080 334,080
After Tax Salvage Value 306,000 3 14.81% 19.20%
Increase in NWC (60,000) 60,000 4 7.41% 11.52%
5 0.00% 11.52%
Free Cash Flow (2,960,000) 1,015,000 1,154,200 1,005,720 916,632 1,282,632 6 0.00% 5.76%
DISCOUNT...