Morten Foods is considering introducing a new line of baked chips. The new product is expected to generate $80 million in revenue. However, 60% of this revenue, or $48 million, is expected to come from existing customers switching purchases. Therefore, the incremental revenue from new customers attributable to the new product is $32 million (40% of $80 million).
Landcruisers Plus is considering an investment in equipment to produce engine adapter kits for off-road vehicles. The $800,000 investment would allow production of 2,000 kits per year, generating $3 million in annual revenue and $480,000 in earnings before interest and taxes. The first year's free cash flow would be negative
1. Managerial accounting stresses accounting concepts and procedur.docxjackiewalcutt
1. Managerial accounting stresses accounting concepts and procedures that are relevant to preparing reports for
investors and banks.
internal users of accounting information.
shareholders and creditors.
the Securities and Exchange Commission (SEC).
2. The goal of managerial accounting is to provide information that managers need for
planning, control, and financial reporting.
control, evaluation, and financial reporting.
planning, control, and decision making.
preparing reports for external users.
3. The financial plans prepared by managerial accountants are referred to as
budgets.
financial statements.
treasurer’s reports.
controller’s opinions.
4. Performance reports often compare current performance with
a competing company’s performance.
shareholders’ expected level of performance.
industry standards.
performance in a prior period or budgeted performance.
5. Below is a performance report that compares budgeted and actual profit of Atlanta Enterprises for the month of June:
Budget
Actual
Difference
Sales
$182,000
$180,000
($2,000)
Less:
Cost of ingredients
145,000
141,000
4,000
Salaries
24,000
23,000
1,000
Controllable profit
$ 13,000
$ 16,000
$ 3,000
In evaluating the department in terms of its changes in sales and expenses, what will be most important to investigate?
Sales
Cost of ingredients
Salaries
Debtors
6. The fundamental difference between managerial and financial accounting is that
all financial accounting information is audited by Certified Public Accountants whereas managerial accounting information is audited by the IMA.
managerial accounting is concerned principally with budgets, whereas financial accounting is concerned with a wider range of the organization’s activities.
managerial accounting provides information for decision-makers within the organization, whereas financial accounting provides information for individuals and institutions external to the organization.
financial accounting information follows U.S. Generally Accepted Accounting Principles, whereas managerial accounting information generally follows rules set forth by the Institute of Management Accountants.
7. Variable cost per unit
increases when the number of units produced increases.
does not change when the number of units produced increases.
decreases when the number of units produced increases.
decreases when the number of units produced decreases.
8. Which of the following is most likely to be a fixed cost?
Cost of wheels for a lawn mower manufacturer
Rent on a factory building
Cost of labor for cashiers at a retail store
Supplies used by the housekeeping staff that cleans hotel rooms
9. Sunland’s Salsa is in the process of preparing a production cost budget for May. Actual costs in April were:
Sunland’s Salsa
Production Costs
April 2020
Production
20,000
Jars of Salsa
Ingredient cost (variable)
$12,000
Labor cost (variable)
8,400
Rent (fixed)
5,000
Depreciation (fixed)
...
Please do not use the answer below; it has already been used. Please.docxjanekahananbw
Please do not use the answer below; it has already been used. Please format it like the example below. Please give brief explanation of how you achieved calculations.
Huffman Trucking
Balance Sheet
(Unaudited)
December 31st
2006
2005
(In Thousands)
Assets
Current Assets
Cash & Cash Equivalents
$51,993
$38,893
Accounts Receivable
56,292
57,441
Prepaid Expenses & Supplies
3,443
3,343
Total Current Assets
$111,728
$99,677
Carrier Operating Property (at cost)
$73,024
$70,957
Less: Allowance for Depreciation
(57,536)
(55,477)
Net Carrier Operating Property
$15,488
$15,480
Assets of Discontinued Operations
16,192
18,891
Goodwill (net)
57,767
53,977
Other Assets
26,613
24,194
Total Assets
$227,788
$212,219
Liabilities and Shareholders' Equity
Current Liabilities
Accounts Payable
$47,124
$39,936
Salaries & Wages
29,753
27,048
Current Portion of Long-Term Debt
2,204
2,514
Freight & Casualty Claims Payable
9,746
8,941
Total Current Liabilities
$88,827
$78,439
Long-Term Liabilities
Accrued Pension & Post-Retirement Health Care
$58,362
$52,721
Long-Term Debt
13,431
15,318
Total Long-Term Liabilities
$71,793
$68,039
Shareholders' Equity
Common Stock
($1.00 par value Authorized: 20,000,000 shares)
$3.882
$3.882
Treasury Shares
(1.952)
(1.952)
Retained Earnings
67,166
65,739
Total Shareholders' Equity
$67,168
$65,741
Total Liabilities and Shareholders' Equity
$227,788
$212,219
$19,211
$18,802
Memo To: All Senior Staff From: Kristen Huffman, CEO & President Re: New Strategic Direction Thank you for attending our annual strategic planning session. Given recent changes in the economy and customer needs, a new direction for our company is necessary. After reviewing how other companies restructured themselves in recent years, we will mirror how UPS® conducts business as a partner/consultant with large customers. For our company, however, we will go a step further and become a warehousing/local just-in-time (JIT) delivery source, instead of providing logistics advice to clients, as UPS® does. To accomplish this, we must integrate this new direction into our upcoming strategic plan and financial planning. First, I need all department managers to prepare their budgets. I would also like our accounting department to move ahead on a preliminary set of pro forma statements, even without final budgets, using the following assumptions. They must determine if external funding is needed. I have attached a summary of assumptions about this new direction. New Strategic Direction Page 2 1. Assume inflation of 4% on expenses, not including depreciation and taxes. This is in addition to the new initiative’s costs. New Strategic Initiative Assumptions Huffman may overcome increased competition and economic slowdown by initiating a new strategy; this will turn our company into a one-stop shop and key logistics company. We will provide consulting services, generate revenues, and become a JIT warehouse/delivery source. A local retailer selling products .
Due Tues., May 2- 7 questions Big Time Picture Frames h.docxsagarlesley
Due Tues., May 2- 7 questions
Big Time Picture Frames has asked you to determine whether the company's ability to pay current
liabilities and total liabilities improved or deteriorated during 2009. To answer this question, you gather the
following data:
______________________________________________2009__________2008
Cash $52, 000 51, 000
Short-term investments 30,000 --
Net receivables 110,000 120, 000
Inventory 217,000 262,000
Total assets 540,000 490,000
Total current liabilities 265,000 202,000
Long-term note payable 44,000 54,000
Income from operations 165,000 153,000
Interest expense 44,000 37,000
Requirement
1. Compute the following ratios for 2009 and 2008:
a. Current ratio
b. Acid-test ratio
c. Debt ratio
d. Times-interest-earned ratio
a. Calculate the current ratio for both years. (Round your answers to two decimal places.)
2009: nothing
2008: nothing
The Variline Inc., comparative income statement follows. 2010 data are given as needed.
Variline, Inc.
Comparative Income Statement
Years Ended December 31, 2012 and 2011
(Dollars in thousands) 2012 2011 2010
Net sales $176,000 $160,000
Cost of goods sold 93,600 86,000
Selling and general expenses 46,800 41,400
Interest expense 9,600 10,900
Income tax expense 10,200 9,200
Net income $15,800 $12,500
Additional data:
Total assets $201,000 $192,000 $174,000
Common stockholders' equity $96,900 $89,800 $79,500
Preferred dividends $3,400 $3,400 $0
Common shares outstanding during the
year 20,000 20,000 18,000
Requirements
1. Calculate the rate of return on net sales.
2. Calculate the rate of return on total assets.
3. Calculate the rate of return on common stockholders' equity.
4. Calculate the EPS.
5. Did the company's operating performance improve or deteriorate during 2012?
Requirement 1. Calculate the rates of return on net sales for 2012 and 2011. (Round your answers to
three decimal places.)
2012:
nothing
2011: nothing
The Specialty Department Stores, Inc., chief executive officer (CEO) has asked you to compare the
company's profit performance and financial position with the average for the industry. The CEO has
given you the company's income statement and balance sheet, as well as the industry average data for
retailers.
Specialty Department Stores, Inc.
Income Statement Compared with Industry Average
Year Ended December 31, 2010
Industry
Specialty Average
Net sales $782,000 100.0 %
Cost of goods sold 526,286 65.8
Gross profit 255,714 34.2
Operating expenses 164,220 19.7
Operating income 91,494 14.5
Other expenses 6,256 0.4
Net income $85,238 14.1 %
Specialty Department Stores, Inc.
Balance Sheet Compared with Industry Average
December 31, 2010
...
a
Part 5 Corporate Valuation and Governance
Easy Problems 1-3
(,,'Lt
AfN ESeEisr-I
laz-2)
AFN Equation
la24)
AFN Equation
Intermediate
Problems 4-6
$2-41
Sales Increase
(12-s)
'Long-Term Financing
Needed
Broussard Skateboard's sales are expected to increase by l5o/o from $8 million in
2013 to $9.2 million in 2014. Its assets totaled $5 million at the end 0f 2013.
Broussard is already at firll capacity, so its assets must grow at the same rate as
projected sales. At the end o{ 2013, current liabilities were $1.4 million, consisting
of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of
accruals. The after-tax profit margin is forecasted to be 5o/o, and the forecasted
payout ratio is 40%o. Use the AFN equation to forecast Broussard's additional funds
needed for the coming year.
Refer to Problem 12-1. \Yhat would be the additional funds needed if the company's year-
end 2013 assets had been $7 million? Assume that all other numbers, including sales, are
the same as in Problem 12-1 and that the company is operating at fi.rll capacity. Why is
this AFN different from the one you found iu Problem 12-1? Is the company s "capital
intensity" ratio the same or different?
Refer to Problem 12-1. Returrr to the assumption that the company had $5 million in
assets at the end of 2013, but now assume that the company pay$ no dividends. Under
these assumptions, what would be the additional funds needed for the coming year? Why
is this AFN difilerent from the one you found in Problem 12-i?
Maggie's Muffins, Inc., generated $5,000,000 in sales during 2013, and its year-end total
assets were $2,500,000. Also, at year-end 2013, current liabilities were $1,000,000,
consisting of $300,000 of notes payable, $500,000 of accounts payable, and $200"000 of
accruals. Looking ahead to 2014, the company estimates that its assets must increase at the
same rate as sales, its spontaneous liabilities will increase at the same rate as sales, its
profit margin will be 7%, and. its payout ratio will be 80%. How large a sales increase can
the company achieve without having to raise funds externally-that is, lvhat is its self-
supporting growth rate?
At year-end 2013, Wallace Landscaping's total assets were $2.17 million and its
accounts payable were $560,000. Sales, which in 2013 were $3.5 million, are expected
to increase by 35o/o in 2014. Total assets and accounts payable are proportional to
sales, and that relationship will be maintained. Wallace fypically uses no culrent
iiabilities other than accounts payable. Common stock amounted to $625,000 in 2013,
and retained earnings were $395,000. Wallace has arranged to sell $195,000 of new
common stock in 2014 to meet some of its financing needs. The remainder of its
financing needs wiil be met by issuing new long-term debt at the end pf 2A14.
(Because &e debt is added at the end of the year, there will be no additional interest
expense due to the new debt.) Its net profit margin on sales is .
Problem 3-2 (LO 2) Simple equity method adjustments, consolidated .docxsleeperharwell
Problem 3-2 (LO 2) Simple equity method adjustments, consolidated worksheet.
On January 1, 2015, Paro Company purchases 80% of the common stock of Solar Company for $320,000. Solar has common stock, other paid-in capital in excess of par, and retained earnings of$50,000, $100,000, and $150,000, respectively. Net income and dividends for two years for Solar are as follows:
2015
2016
Net income
$60,000
$90,000
Dividends
20,000
30,000
On January 1, 2015, the only undervalued tangible assets of Solar are inventory and the building. Inventory, for which FIFO is used, is worth $10,000 more than cost. The inventory is sold in 2015. The building, which is worth $30,000 more than book value, has a remaining life of10 years, and straight-line depreciation is used. The remaining excess of cost over book value is attributed to goodwill.
Required
1. Using this information and the information in the following trial balances on December 31, 2016, prepare a value analysis and a determination and distribution of excess schedule:
Paro Company
Solar Company
Inventory, December 31
100,000
50,000
Other Current Assets
136,000
180,000
Investment in Solar Company
400,000
Land
50,000
50,000
Buildingsand Equipment
350,000
320,000
Accumulated Depreciation
(100,000)
(60,000)
Goodwill
Other Intangibles
20,000
Current Liabilities
(120,000)
(40,000)
Bonds Payable
(100,000)
Other Long-Term Liabilities
(200,000)
Common Stock—Paro Company
(200,000)
Other Paid-In Capital in Excess of Par—Paro Company
(100,000)
Retained Earnings—Paro Company
(214,000)
Common Stock—Solar Company
(50,000)
Other Paid-In Capital in Excess of Par—Solar Company
(100,000)
Retained Earnings—Solar Company
(190,000)
Net Sales
(520,000)
(450,000)
Cost of Goods Sold
300,000
260,000
Operating Expenses
120,000
100,000
Subsidiary Income
(72,000)
Dividends Declared—Paro Company
50,000
Dividends Declared—Solar Company
30,000
Totals
0
0
2. Complete a worksheet for consolidated financial statements for 2016. Include columns for eliminations and adjustments, consolidated income, NCI, controlling retained earnings, and consolidated balance sheet.
Problem 3-10 (LO3, 5) 100%, cost method worksheet, several adjustments, third year.
Refer to the preceding information for Paulcraft’s acquisition of Switzer’s common stock. Assume that Paulcraft pays $480,000 for 100% of Switzer common stock. Paulcraft uses the cost method to account for its investment in Switzer. Paulcraft and Switzer have the following trial balances on December 31, 2017 as shown on page 191.
Paulcraft
Switzer
Cash
100,000
110,000
Accounts Receivable
90,000
55,000
Inventory
120,000
86,000
Land
100,000
60,000
Investment in Switzer
480,000
Buildings
800,000
250,000
Accumulated Depreci.
1Problem 18.1 Natural MosaicNatural Mosaic Company (U.S.) is cons.docxfelicidaddinwoodie
1Problem 18.1 Natural MosaicNatural Mosaic Company (U.S.) is considering investing Rs50,000,000 in India to create a wholly owned tile manufacturing plant to export to the European market. After five years the subsidiary would be sold to Indian investors for Rs100,000,000. A pro forma income statement for the Indian operation predicts the generation of Rs7,000,000 of annual cash flow, is listed below. The initial investment will be made on December 31, 2011, and cash flows will occur on December 31 of each succeeding year. Annual cash dividends to Philadelphia Composite from India will equal 75% of accounting income. The U.S. corporate tax rate is 40% and the Indian corporate tax rate is 50%. Because the Indian tax rate is greater than the U.S. tax rate, annual dividends paid to Natural Mosaic will not be subject to additional taxes in the United States. There are no capital gains taxes on the final sale. Natural Mosaic uses a weighted average cost of capital of 14% on domestic investments, but will add 6 percentage points for the Indian investment because of perceived greater risk. Natural Mosaic forecasts the rupee/dollar exchange rate for December 31 on the next six years are listed below.What is the net present value and internal rate of return on this investment?AssumptionsValuesAssumptionsValuesInitial investment in India (Rs)50,000,000Dividend distribution per year75.00%Indian corporate tax rate50.00%US corporate tax rate40.00%Sale price in year 5 (Rs)100,000,000India risk premium to WACC6.00%Natural Mosaic's WACC14.00%Pro forma income and cash flow012345(December 31st)201120122013201420152016Sales revenue30,000,00030,000,00030,000,00030,000,00030,000,000Less cash operating expenses(17,000,000)(17,000,000)(17,000,000)(17,000,000)(17,000,000)Gross income13,000,00013,000,00013,000,00013,000,00013,000,000Less depreciation expenses(1,000,000)(1,000,000)(1,000,000)(1,000,000)(1,000,000)Earnings before interest and taxes12,000,00012,000,00012,000,00012,000,00012,000,000Less Indian taxes at 50%(6,000,000)(6,000,000)(6,000,000)(6,000,000)(6,000,000)Net income6,000,0006,000,0006,000,0006,000,0006,000,000Add back depreciation1,000,0001,000,0001,000,0001,000,0001,000,000Annual cash flow7,000,0007,000,0007,000,0007,000,0007,000,000Initial investment(50,000,000)Terminal value, sales100,000,000Cash flows for discounting(50,000,000)7,000,0007,000,0007,000,0007,000,000107,000,000 Present value factor20%1.00000.83330.69440.57870.48230.4019 Present value of cash flow(50,000,000)5,833,3334,861,1114,050,9263,375,77243,000,900NPV of India investment (project view)11,122,042IRR of Indian investment (project view)25.96%Cash inflows & outflows to US201120122013201420152016Initial investment (Rs)(50,000,000)Dividends received in the US (Rs)4,500,0004,500,0004,500,0004,500,0004,500,000Sales value (Rs)100,000,000Net cash flows to parent after-tax (Rs)(50,000,000)4,500,0004,500,0004,500,0004,500,000104,500,000Expected exchange rate (Rs/$)50.0054 ...
ACCT 505 Week 1-7 All Discussion Questions
ACCT 505 Week 1 Case Study
ACCT 505 Week 2 Quiz Job Order and Process Costing Systems
ACCT 505 Week 2 Quiz Set 2
Similar to Analyzing project cash flow/abshor.marantika/abilio christofory-fani nurfadila n.a-restu aditya p_3-03 (20)
Honest Reviews of Tim Han LMA Course Program.pptxtimhan337
Personal development courses are widely available today, with each one promising life-changing outcomes. Tim Han’s Life Mastery Achievers (LMA) Course has drawn a lot of interest. In addition to offering my frank assessment of Success Insider’s LMA Course, this piece examines the course’s effects via a variety of Tim Han LMA course reviews and Success Insider comments.
How to Make a Field invisible in Odoo 17Celine George
It is possible to hide or invisible some fields in odoo. Commonly using “invisible” attribute in the field definition to invisible the fields. This slide will show how to make a field invisible in odoo 17.
Unit 8 - Information and Communication Technology (Paper I).pdfThiyagu K
This slides describes the basic concepts of ICT, basics of Email, Emerging Technology and Digital Initiatives in Education. This presentations aligns with the UGC Paper I syllabus.
Model Attribute Check Company Auto PropertyCeline George
In Odoo, the multi-company feature allows you to manage multiple companies within a single Odoo database instance. Each company can have its own configurations while still sharing common resources such as products, customers, and suppliers.
The French Revolution, which began in 1789, was a period of radical social and political upheaval in France. It marked the decline of absolute monarchies, the rise of secular and democratic republics, and the eventual rise of Napoleon Bonaparte. This revolutionary period is crucial in understanding the transition from feudalism to modernity in Europe.
For more information, visit-www.vavaclasses.com
Macroeconomics- Movie Location
This will be used as part of your Personal Professional Portfolio once graded.
Objective:
Prepare a presentation or a paper using research, basic comparative analysis, data organization and application of economic information. You will make an informed assessment of an economic climate outside of the United States to accomplish an entertainment industry objective.
Palestine last event orientationfvgnh .pptxRaedMohamed3
An EFL lesson about the current events in Palestine. It is intended to be for intermediate students who wish to increase their listening skills through a short lesson in power point.
Instructions for Submissions thorugh G- Classroom.pptxJheel Barad
This presentation provides a briefing on how to upload submissions and documents in Google Classroom. It was prepared as part of an orientation for new Sainik School in-service teacher trainees. As a training officer, my goal is to ensure that you are comfortable and proficient with this essential tool for managing assignments and fostering student engagement.
Synthetic Fiber Construction in lab .pptxPavel ( NSTU)
Synthetic fiber production is a fascinating and complex field that blends chemistry, engineering, and environmental science. By understanding these aspects, students can gain a comprehensive view of synthetic fiber production, its impact on society and the environment, and the potential for future innovations. Synthetic fibers play a crucial role in modern society, impacting various aspects of daily life, industry, and the environment. ynthetic fibers are integral to modern life, offering a range of benefits from cost-effectiveness and versatility to innovative applications and performance characteristics. While they pose environmental challenges, ongoing research and development aim to create more sustainable and eco-friendly alternatives. Understanding the importance of synthetic fibers helps in appreciating their role in the economy, industry, and daily life, while also emphasizing the need for sustainable practices and innovation.
Embracing GenAI - A Strategic ImperativePeter Windle
Artificial Intelligence (AI) technologies such as Generative AI, Image Generators and Large Language Models have had a dramatic impact on teaching, learning and assessment over the past 18 months. The most immediate threat AI posed was to Academic Integrity with Higher Education Institutes (HEIs) focusing their efforts on combating the use of GenAI in assessment. Guidelines were developed for staff and students, policies put in place too. Innovative educators have forged paths in the use of Generative AI for teaching, learning and assessments leading to pockets of transformation springing up across HEIs, often with little or no top-down guidance, support or direction.
This Gasta posits a strategic approach to integrating AI into HEIs to prepare staff, students and the curriculum for an evolving world and workplace. We will highlight the advantages of working with these technologies beyond the realm of teaching, learning and assessment by considering prompt engineering skills, industry impact, curriculum changes, and the need for staff upskilling. In contrast, not engaging strategically with Generative AI poses risks, including falling behind peers, missed opportunities and failing to ensure our graduates remain employable. The rapid evolution of AI technologies necessitates a proactive and strategic approach if we are to remain relevant.
1. CONTOH SOAL
“ANALYZING PROJECT CASH FLOW”
DISUSUN OLEH:
ABILLIO CHRISTOFORY (4301170117)
FANI NURFADILA N.A (4301170233)
RESTU ADITYA P (4301170001)
DOSEN MATA KULIAH MANAJEMEN KEUANGAN
ABSOR MARANTIKA
KELAS 3-03
PRODI D-III KEBENDAHARAAN NEGARA
JURUSAN MANAJEMEN KEUANGAN
POLITEKNIK KEUANGAN NEGARA STAN
2. (Calculating incremental revenues from new product)
morten food products, Inc. Is a regional manufacturer of salty food snacks. The firm competes directly
with the national brands including Frito-Lay but only in the southeastern part of the United States.
Next year Morten expects total revenues of $400 million from its various chip products. Moreover, a
new line of baked chips is expected to produce revenue of $80 million. However, the firm’s analysts
estimate that about 60% of this revenue will come from existing customers who switch their
purchases from one of the firm’s existing products to the new, healthier baked chips. What level of
incremental sales should the company analyst attribute to the new line of baked chips?
Jawab :
Morten’s new product line is expected to generate $80 million in sales next year but only 40% of that
amount should be considered incremental revenue to Morten:
a. $80,000,000 × 0.4 = $32,000,000.
Since some of Morten’s existing customers would have selected a non-Morten product if the
company did not introduce the healthier baked chips, the incremental revenue to Morten from
introducing the new product is actually greater than the $32,000,000 calculated in part a. In that
case, the amount of additional revenue from the introduction of the new product would also
include the value of the sales that would be lost from the defection of existing customers.
(Determining relevant cash flows)
Landcruisers Plus (LP) has operated an online retail store selling off-road truck parts. As the
name implies, the firm specializes in parts for the venerable Toyota FJ40, which is known
throughout the world for its durability and off-road prowess. The fact that Toyota stopped
building and exporting the FJ40 to the U.S. market in 1982 meant that FJ40 owners depended
more and more on remanufactured parts to keep their beloved off-road vehicles running.
More and more FJ40 owners are replacing the original inline six-cylinder engines with a
modern American-built engine. The engine replacement requires mating the new engine with
the Toyota drive train. LP’s owners had been offering engine adaptor kits for some time but
have recently decided to begin building their own units. To make the adaptor kits, the firm
would need to invest in a variety of machine tools costing a total of $800,000.
LP’s management estimates that the company will be able to borrow $500,000 from its bank
and pay 10 percent interest. The remaining funds would have to be supplied by LP’s owners.
The firm estimates that it will be able to sell 2,000 units a year for $1,500 each. The units
would cost $1,200 each in cash expenses to produce (this does not include depreciation
expense of $80,000 per year or interest expense of $40,000). After all expenses, the firm
expects earnings before interest and taxes of $480,000. The firm pays taxes equal to 30
percent, which results in net income of $336,000 per year over the 10-year expected life of
the equipment.
a. What is the annual free cash flow LP should expect to receive from the investment in
Year 1, assuming that it does not require any other investments in either capital
equipment or working capital and that the equipment is depreciated over a 10-year life
to a zero salvage and book value? How should the financing cost associated with the
$---,--- loan be incorporated into the analysis of cash flow?
3. b. If the firm’s required rate of return for its investments in 10 percent and the
investment has a 10-year expected life, what is the anticipated NPV of the
investments?
Answer :
a. Bagian 1
T=0 T=1 sampai T=10
Revenue $ 3,000,000
Less: Cost of Goods Sold ($ 2,400,000)
Gross Profit $ 600,000
Less: Cash Operating
Expenses
($ 40,000)
Less: Depreciation ($ 80,000)
Net Operating Income $ 480,000
Less: Taxes ($ 144,000)
Net Operating Profit After
Taxes (NOPAT)
$ 336,000
Plus: Depreciation $ 80,000
Operating Cash Flow $ 416,000
Less: Capital Expenditures
(CAPEX)
($ 800,000)
Less: Additional Net
Operating Working Capital
$ 0
Free Cash Flow ($ 800,000) $ 416,000
Biaya operasi tunai (Cash Operating Expenses) adalah sebesar $ 40,000 dengan mengingat
tingkat pendapatan operasional bersih (Net Operating Income) yang dinyatakan dalam soal ($
400,000).
Bagian 2
Biaya pembiayaan utang (Debt Financing) tidak termasuk dalam analisis arus kas proyek
karena tingkat diskonto yang diperlukan proyek memperhitungkan bagaimana proyek
tersebut dibiayai. Akibatnya, biaya bunga (Interest Expenses) dihilangkan dari analisis diatas.
b. Dengan asumsi tidak ada nilai sisa (No Salvage Value) dan nilai buku nol (Zero Book
Value) di tahun T=10, NPV proyek adalah :
𝑁𝑃𝑉 = −$ 800,000 + $ 416,000 × [
1−{
1
1.1010}
0.10
] = −$ 800,000 + $416,000 ×
6.144567106 = $ 1,856,139.916
4. (Calculating Changes in net operating working capital)
Tetious Dimensions is introducing a new product that is expexcts will increase its net
operating income by $775,000. The company has a 34% marginal tax rate. This project will
also produce $200,000 of depreciation per year.In addition, it will cause the following
changes:
Without the project With the project
Accounts Receivable $55,000 $89,000
Inventory $100,000 $180,000
Accounts Payable $70,000 $120,000
What is the project’s free cash flow for year 1?
Answer :
NOWC= (89,000-55,000) + (180,000-100,000) - (120,000-70,000)
= 64,000
Net operating Income $ 775,000
Minus : Taxes(34% x 775,000) (263,500)
Plus : Change in Depreciation 200,000
Minus : Change in Capital Expenditure 0
Minus : Change in NOWC (64,000)
$ 647,500
Free Cash flow for year 1 = $647,500
IncreaseinCapital
Free Cash Net Operating Depreciation
= Taxes Expenditur
Flow Income(Profit) Expense
OperatingCashFlow
Net OperatingProfit after Taxes or NOPAT
IncreaseinNet
es Operating Working
( ) Capital )CAPEX (NOWC
5. (Calculating operating cash flows)
The heritage Farm Implement Company is considering an investment that is expected to generate
revenues of $5,000,000 per year. The project will also involve cash expenses (including both fixed
and variable costs) of 800,000 while increasing deprciation by $400,000 per year. If the firm’s tax rate
is 25% what is the project’s estimated net operating profit after taxes (NOPAT)?
Jawab :
operating cash flow net operating income taxes depreciation.
NOPAT
We find net operating income as:
net operating income revenues cost of goods sold cash operating expenses depreciation.
Thus, for our project we have:
net operating income $5,000,000 $800,000 $400,000 $3,800,000,
where we have combined cost of goods sold and cash operating expenses into the single $800,000
figure. Now we can find operating cash flow as:
operating cash flow net operating income taxes depreciation.
$3,800,000 taxes $400,000
[$3,800,000 (1 0.25)] $400,000
$2,850,000 $400,000
NOPAT
$3,250,000.
The spreadsheet below outlines these calculations:
Revenue 5.000.000
Less : COGS
Gross profit
Less : cash operating expense (800.000)
Less : depreciation (400.000)
Net operating income 3.800.000
Less : taxes (950.000)
NOPAT 2.850.000
Plus : depreciation 400.000
Operating cash flow 3.250.000
6. (Calculating project cash flows and NPV)
As part of its planning for the coming Christmas season, Criswell Motorsports is considering
whether to expand its product line that currently consists of skateboards to include gas-
powered skateboards. The company feels it can sell 2,000 of these per year for – years (after
which time this project is expected to shut down, with solar-powered skateboards taking
over). Each gas-powered skateboards would have variable costs of $ 50 and sell for $ 250;
annual fixed costs associated with production would be $ 200,000. In addition, there would
be a $ 500,000 initial expenditure associated with the purchase of new production equipment.
It is assumed that the simplified straight-line method would be used to depreciate the initial
expenditure down to zero over 10 years. The project would also require a one-time initial
investment of $ 100,000 in net working capital asoociated with inventory, and this working-
capital investment would be recovered when the project is shut down. Finally, the firm’s
marginal tax rate is 35 percent.
a. What is the initial cash outlay associated with this project?
b. What are the annual net cash flows associated with this project for Years 1 through 9?
c. What is the terminal cash flow in Year 10 (that is, what is the free cash flow in Year
10 plus any additional cash flows associated with termination of the project)?
d. What is the project’s NPV, given a 10 percent require rate of return?
Answer :
a. Arus kas awal (Initial Cash Flow) (T=0) untuk proyek skateboard bertenaga gas akan
menjadi biaya untuk membeli peralatan produksi baru (Production Equipment), $
500.000, ditambah investasi tambahan (Incremental Investment) dalam persediaan
sebesar $ 100.000 = $ 600.000.
b. Arus kas bersih tahunan (Annual Net Cash Flow) untuk proyek dari T=1 ke T=9 akan
menjadi pendapatan dari penjualan skateboard baru, dikurangi biaya produksi variabel
dan tetap, dikurangi pajak, ditambah manfaat dari depresiasi. Artinya :
Operating Cash Flow = Net Operating Income – Taxes + Depreciation
= (Revenue – Cost of Goods Sold – Cash Operating Expenses –
Depreciation) – Taxes + Depreciation
= ($ 500,000 - $ 100,000 - $ 200,000 - $ 50,000) – (Net Operating
Income x 35%) + $ 45,000
= $ 150,000 – ($ 150,000 x 35%) + $ 45,000
= $ 142,500
T=0 T=1 sampai T=9 T=10
Revenue $ 500,000 $ 500,000
Less : Cost of Goods
Sold
($ 100,000) ($ 100,000)
Gross Profit $ 400,000 $ 400,000
7. Less : Cash
Operating Expenses
($ 200,000) ($ 200,000)
Less : Depreciation ($ 50,000) ($ 50,000)
Net Operating
Income
$ 150,000 $ 150,000
Less : Taxes ($ 52,500) ($ 52,500)
Net Operating Profit
After Income
(NOPAT)
$ 97,500 $ 97,500
Plus : Depreciation $ 50,000 $ 50,000
Operating Cash Flow $ 147,500 $ 147,500
Less : Capital
Expenditures
(CAPEX)
($ 500,000)
Less : Additional Net
Operating Working
Capital
($ 100,000) $ 100,000
Free Cash Flow ($ 600,000) $ 147,500 $ 247,500
c. Pada tahun 10, perusahaan akan menambah jumlah dari pemulihan investasi modal
kerja $ 100,000 kami, dengan total T=10 arus kas $ 247,500.
d. 1 2
0 1 2
NPV ... ,
(1 ) (1 ) (1 )
n
n
CFCF CF
CF
k k k
T CFt PV(CFt) (10%)
0 ($ 600,000) ($ 600,000)
1 $ 147,500 $ 134,091
2 $ 147,500 $ 121,901
3 $ 147,500 $ 110,819
4 $ 147,500 $ 100,744
5 $ 147,500 $ 91,586
6 $ 147,500 $ 83,260
7 $ 147,500 $ 75,690
8 $ 147,500 $ 68,810
9 $ 147,500 $ 62,554
10 $ 247,500 $ 95,422
NPV $ 344,877
8. (Calculating Project Cash Flows, NPV, PI, IRR in a comprehensive problem)
Traid Winds Corporation, a firm in the 30% marginal tax rate bracket with 10% required rate
of return or discount rate, is considering a new project that involves the introduction of a new
product. This Project is expected to last 5 years, and then, because this is somewhat of a fad
project, it will be terminated. Given the following information, determine the net cash flows
associated with the project and the project’s NPV, PI, and IRR. Apply the appropriate
decision criteria.
Cost of new plant and equipment : $29,700,000
Shipping and installation Cost : 300,000
Unit Sales:
Year Unit Sold
1 75,000
2 135,000
3 130,000
4 80,000
5 70,000
Sales Price per unit : $400/unit in years 1-4, $350/unit in year 5
Variable cost per unit: $200/unit
Annual Fixed Cost : $1,000,000
Working Capital Requirements : There will be an initial working capital requirement of
$300,000 to get production started. For each year, the total investment in net working capital
will be equal to 15% of the dollar value of sales for that year.Thus, the investment in working
capital will increase during years 1 and 2 and then decrease in years 3 through 5. Finally, all
working capital will be liquidated at the termination of the project at the end of year 5.
The depreciation method: Use straight line method and it is assumed has no salvage value
Answer :
Annual Depreciation expense (using straight line method)
= (Cost of equipment + Shipping & Installation Expense – Expected salvage value)
÷ (Life of the equipment)
= (29,700,000 + 300,000) ÷ 5 = 6,000,000
9. Menghitung Working Capital
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Sales 30000000 54000000 52000000 32000000 24500000
NOWC 300000 4500000 8100000 7800000 4800000 3675000
Change
NOWC
300000 (4200000) (3600000) 300000 3000000 1125000
Increase
NOWC
(300000) (4200000) (3600000) 300000 3000000 4800000
Menghitung Free Cas Flow
Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 30000000 54000000 52000000 32000000 24500000
Less :
Variable
Cost
15000000 27000000 26000000 16000000 12250000
Less :
Fixed
Expense
1000000 1000000 1000000 1000000 1000000
Less :
Depreciati
on
6000000 6000000 6000000 6000000 6000000
NOI 8000000 20000000 19000000 9000000 5250000
Less :
Taxes
2400000 6000000 5700000 2700000 1575000
NOPAT 5600000 14000000 13300000 6300000 3675000
Plus :
Depreciati
on
6000000 6000000 6000000 6000000 6000000
Operating
Cash Flow
11600000 20000000 19300000 12300000 9675000
Less :
Increase in
NOWC
300000 4200000 3600000 (300000) (3000000) (4800000)
Less :
Increase in
CAPEX
30000000
Free Cash
Flow
(30200000) 7400000 16400000 19000000 9300000 4875000
10. Menghitung NPV
NPV = (15,200,000) + 7,400,000 + 19,000,000 + 16,400,000 + 9,300,000 + 4,875,000
(1+0,1)1
(1+0,1)2
(1+0,1)3
(1+0,1)4
(1+0,1)5
= (30,200,000) + 6,727,273 + 15,702,479 + 12,321,563 + 6,352,025 + 3,026,991
= 13,930,331
Menghitung PI
PI = PV of expected cash flows
-Initial Outlay
= 44,130,331
30,200,000
= 1,46
Menghitug IRR
1 2
1 2
0
Cash Flow Cash Flow Cash Flow
Cash FlowNet Present for Year 1 ( ) for Year 2 ( ) for Year ( )
for Year 0 ( )Value ( ) Discount Discount Discount
1 1 1
Rate ( ) Rate ( ) Rate ( )
nCF CF n CF
CFNPV
k k k
n
11. (calculating inflation and project cash flows)
You are submitting a proposal to a prospective new client for the provission of haulage for the next
five years. It has been agreed that fuel costs for the duration of the project can be calculated using the
predicted price of fuel in five years. The current cost of fuel is 1.28 per liter. What price will ypu use
if inflation is projected to be
a. 4 percent?
b. 6 percent?
c. 8 percent?
Jawab :
a. To determine the cost of a fuel in 5 years, if the price today is $1.28 and the inflation rate is
4% per year, can be found as:
cost in 5 years (cost today) (1 inflation rate)# of years
($1.28) (1.04)5
$1.55
b. To determine the cost of a fuel in 5 years, if the price today is $1.28 and the inflation rate is
6% per year, can be found as:
cost in 5 years (cost today) (1 inflation rate)# of years
($1.28) (1.06)5
$1.71
c. To determine the cost of a fuel in 5 years, if the price today is $1.28 and the inflation rate is
8% per year, can be found as:
cost in 5 years (cost today) (1 inflation rate)# of years
($1.28) (1.08)5
$1.88
(Calculating replacement project cash flows)
Madrano’s Wholesale Fruit Company, located in McAllen, Texas, is considering the purchase
of a new fleet of trucks to be used in the delivery of fruits and vegetables grown in the Rio
Grande Valley of Texas. If the company goes through with the purchase, it will spend $
500,000 on eight rigs. The new trucks will be kept for 5 years, during which time they will be
depreciated toward a $ 50,000 salvage value using straight-line depreciation. The rigs are
expected to have a market value in 5 years equal to their salvage value. The new trucks will
be used to replace the company’s older fleet of eight trucks, which are fully depreciated but
can be sold for an estimated $ 30,000 (because the older trucks have a current book value of
zero, the selling price is fully taxable at the firm’s 35 percent tax rate). The existing truck
fleet is ecpected to be useable for five more years, after which time te rigs will have no
salvage value. The existing fleet of trucks uses $ 300,000 per year in diesel fuel, whereas the
new, more efficient fleet will use only $ 200,000.
12. In addition, the new fleet will be covered under warranty, so the maintenance costs per year
are expected to be only $ 15,000 compared to $ 40,000 for the existing fleet.
a. What are the differential operating cash flow savings per year during Years 1 through
5 for the new fleet?
b. What is the initial cash outlay required to replace the existing fleed with the newer
trucks?
Answer :
a. Untuk proyek penggantian traktor Madrano Fruit Company, proyek ini tidak memiliki
dampak langsung terhadap pendapatan. Sebaliknya, ini berdampak pada biaya
operasi:
cash operating expenses new expenses old expenses
[new $ 200,000 fuel costs + new $ 15,000 maintenance costs] [old
$ 300,000 fuel costs old $ 40,000
maintenance costs]
$ 215,000 $ 340,000 $ 125,000/year.
Dengan demikian membeli traktor baru menurunkan biaya operasi tunai Madrano sebesar $
125,000 / tahun, yang membuat perusahaan lebih mungkin untuk terus maju.
depreciation new depreciation old depreciation
$ 90,000 $ 0 $ 90,000.
net operating income revenue cash operating expenses depreciation.
$ 0 ($ 125,000) $ 90,000 $ 35,000.
operating cash flow net operating income taxes depreciation,
$ 35,000 taxes $ 90,000
$35,000 (1 T) $ 90,000
$35,000 (1 0.35) $ 90,000 $ 112,750.
b. Ada dua jenis arus kas lain yang perlu dipertimbangkan: yang spesifik untuk t=0 (arus
kas awal) dan setiap arus kas khusus di akhir proyek (arus kas terminal, di sini di t=5).
Pada t=0, Madrano harus membayar $ 500,000 untuk traktor baru. Itu juga akan
menjual traktor lama seharga $ 50,000; karena rig lama ini sepenuhnya disusutkan,
harga penjualan $ 50,000 penuh mewakili keuntungan kena pajak, sehingga Madrano
perlu membayar [($ 50,000)X(35%)]= $ 17,500 pajak atas penjualan. Jumlah bersih
setelah pajak yang diterima untuk rig lama karena itu ($ 50,000 - $ 17,500)= $ 32,500.
Karena tidak ada efek modal kerja dari rig baru, maka total arus kas awal karenanya (-
$ 500,000 + $ 32,500)=-$ 467,500.