Year 0

Incremental Earnings Forecast ($000s)

1 Sales -
2 Cost of Goods Sold -
3 Gross Profits -
4 Selling, General, and Administrative -
5 Research and Development (15,000)
6 Depreciation -
7 EBIT (15,000)
8 Income Tax at 20% 3000
9 Unlevered Net Income (12,000)

Year 0
Incremental Earnings Forecast ($000s)
No of units
Sale Price
Cost Price
1 Sales -
2 Cost of Goods Sold -
3 Gross Profits 0
4 Selling, General, and Administrative 0
5 Research and Development -15000
6 Depreciation -7500
7 EBIT -22500
8 Income Tax at 20% 4500
9 Unlevered Net Income -18000
 1 2 3 4 5

26000 26000 26000 26000 -

(11,000) (11,000) (11,000) (11,000) -
15000 15000 15000 15000 -
(2,800) (2,800) (2,800) (2,800) -
- - - - -
(1,500) (1,500) (1,500) (1,500) (1,500)
10700 10700 10700 10700 (1,500)
(2,140) (2,140) (2,140) (2,140) 300
8560 8560 8560 8560 (1,200)

1 2 3 4 5

50000 100000 150000 200000

260 234 210.6 189.54
120 96 76.8 61.44
12000 21400 28590 33908 -
-5400 -8400 -9720 -9888 -
6600 13000 18870 24020 0
-3000 -3000 -3000 -3000 0
0 0 0 0 0
0 0 0 0 0
3600 10000 15870 21020 0
-720 -2000 -3174 -4204 0
2880 8000 12696 16816 0