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    Ujian 3-Operating Cash Inflow

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    Novianty Kaseger
    This document contains calculations of operating cash inflows for a proposed new machine and the present old machine over 5 years. It shows earnings before depreciation and taxes would be $170,000 each year for the new machine, with depreciation and taxes decreasing operating cash inflows each year from $115,600 to $110,160. For the old machine, earnings would decrease from $160,000 to $140,000 while cash inflows also decrease from $108,920 to $84,000. It determines the incremental cash inflows would be $10,000 to $30,000 by getting the difference between the new and old machine each year. It also includes a calculation to determine the initial $104

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    Ujian 3-Operating Cash Inflow

    Uploaded by

    Novianty Kaseger
    6 views3 pages
    This document contains calculations of operating cash inflows for a proposed new machine and the present old machine over 5 years. It shows earnings before depreciation and taxes would be $170,000 each year for the new machine, with depreciation and taxes decreasing operating cash inflows each year from $115,600 to $110,160. For the old machine, earnings would decrease from $160,000 to $140,000 while cash inflows also decrease from $108,920 to $84,000. It determines the incremental cash inflows would be $10,000 to $30,000 by getting the difference between the new and old machine each year. It also includes a calculation to determine the initial $104

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    ujian 3-operating cash inflow

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    This document contains calculations of operating cash inflows for a proposed new machine and the present old machine over 5 years. It shows earnings before depreciation and taxes would be $170,000 each year for the new machine, with depreciation and taxes decreasing operating cash inflows each year from $115,600 to $110,160. For the old machine, earnings would decrease from $160,000 to $140,000 while cash inflows also decrease from $108,920 to $84,000. It determines the incremental cash inflows would be $10,000 to $30,000 by getting the difference between the new and old machine each year. It also includes a calculation to determine the initial $104

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    6 views3 pages

    Ujian 3-Operating Cash Inflow

    Uploaded by

    Novianty Kaseger
    This document contains calculations of operating cash inflows for a proposed new machine and the present old machine over 5 years. It shows earnings before depreciation and taxes would be $170,000 each year for the new machine, with depreciation and taxes decreasing operating cash inflows each year from $115,600 to $110,160. For the old machine, earnings would decrease from $160,000 to $140,000 while cash inflows also decrease from $108,920 to $84,000. It determines the incremental cash inflows would be $10,000 to $30,000 by getting the difference between the new and old machine each year. It also includes a calculation to determine the initial $104

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as xlsx, pdf, or txt
    of 3

    Calculation of operating cash inflows

    With proposed machine (new)


    year 1 year 2 year 3 year 4 year 5
    earnings before depreciation, interest and taxes 170000 170000 170000 170000 170000
    (-)depreciation 34000 54400 32300 20400 20400
    earnings before interest and taxes 136000 115600 137700 149600 149600
    (-)taxes rate 54400 46240 55080 59840 59840
    net operating profit after taxes 81600 69360 82620 89760 89760
    (+)depreciation 34000 54400 32300 20400 20400
    Operating cash inflows 115600 123760 114920 110160 110160

    Calculation of operating cash inflows


    With present machine (old)
    earnings before depreciation, interest and taxes 160000 150000 140000 140000 140000
    (-)depreciation 32300 20400 20400 8500 0
    earnings before interest and taxes 127700 129600 119600 131500 140000
    (-)taxes rate 51080 51840 47840 52600 56000
    net operating profit after taxes 76620 77760 71760 78900 84000
    (+)depreciation 32300 20400 20400 8500 0
    Operating cash inflows 108920 98160 92160 87400 84000

    incremental 10000 20000 30000 30000 30000


    Incremental depre 1700 34000 11900 11900 20400
    Determining the initial investment
    year 6 Installed cost of proposed machine
    0 cost of proposed machine 150000
    8500 (+)installation cost 20000
    -8500 total installed cost -proposed (depreciable value) 170000
    -3400 (-)After-tax proceeds from sale of present machine
    -5100 proceeds from sale of present machine 105000
    8500 (-)tax on sale of present machine 22800
    3400 Total after-tax proceeds-present 82200
    (+/-)Change in net working capital 17000
    Initial Investment 104800

    0 100000
    0 60000
    0
    0
    0
    0
    0

    0
    8500
    qty 400
    sales 100000 250
    variable expenses 60000 150
    contribution margin 40000 100
    fixed expenses 35000
    net operating income 5000

    qty 100
    sales 25000 250
    variable expenses 15000 150
    contribution margin 10000 100
    fixed expenses 35000
    net operating income -25000

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