Projected Income Statement for New Product

Year 1
Year 2
Year 3

Year 4

Year 5

Expected Annual Sales of New Product

Expected Costs of New Product:
Direct materials
Direct labor
Overhead
Depreciation on new asset
Selling and administrative expenses
Income before taxes
Income tax at 25% marginal rate
Net income
Net cash flow
Check figures are provided for this table so that you don't have to unecessarily redo your work beyond this point.
Do not work beyond this point unless all of your numbers agree with the corresponding check figures.
Although you will not use these totals in working this task, the following are provided as check figures:
The sum of net cash flow for the first three years is $291,033; ******Your total cash flow is
0
for the last three years it is $246,867************************************Your total cash flow is
0
Because the discount factors are different, net cash flow in the above table must be accurate for each year.
If you cannot figure out how to get your numbers to match the check figures by using the suggested learning resources,
you should contact your mentor or progress manager.

Payback Period:
(add rows as necessary
to show your calculations)

Cash Flows
Investment
----------------Year 1
Year 2
Year 3
Year 4

Running
Balance

Use the above box to identify the payback

Year 6

point in years, months.

Year 5
Year 6

Net Present Value:

Cash Flows
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Working Capital Return
Salvage Return
Total Present Value
Investment
Net Present Value

Internal Rate of Return:

Cash Flows
Investment
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6 + working capital + salvage return
Internal Rate of Return

PV Factors

Present
Value

Profitability Index
(in the cell to the right calculate the profitability index for
the asset, enter the formula you used.)