1.

11 =1+11%
Year - 1 2 3 4 5
Revenue 90,000 97,500 105,000 110,000 100,000
Operation expense 25,000 27,000 29,000 28,000 30,000
EBITDA 65,000 70,500 76,000 82,000 70,000
Depreciation & Amortization 22,400 35,840 21,504 12,902 12,902
EBIT 42,600 34,660 54,496 69,098 57,098
0.6 25,560 20,796 32,698 41,459 34,259
+Depreciation 47,960 56,636 54,202 54,361 47,161
-Capital expenditure (112,000) 8,580
-Workhing capital (15,000) 15,000
FCF (127,000) 47,960 56,636 54,202 54,361 70,741
Present of CF (127,000) 43,207 45,967 39,632 35,809 41,982
NPV 79,597
EAC 21,537 >$20.000 cash flow per year of current machine
--> Accepted acquisition new machine
Year 1 2 3 4 5 6
Beginning Book Valu 112,000 89,600 53,760 32,256 19,354 6,451
MACRS rate 20% 32% 19% 12% 12% 6%
MACRS Depreciation 22,400 35,840 21,504 12,902 12,902 6,451
Ending Book value 89,600 53,760 32,256 19,354 6,451 -
Capital expenditure 8,580
-
 1.1 =1+10%
Year 0 1 2 3 4
Quantities 50,000 75,000 105,000 105,000
Selling price 50 47.5 45.125 42.86875
Revenue 2,500,000 3,562,500 4,738,125 4,501,219
Fixed cost 250,000 250,000 250,000 250,000
Labor per unit 13 13.65 14.3325 13.329225
Labor expense 650,000 1,023,750 1,504,913 1,399,569
Material per unit 15 16 17 16
Material expense 750,000 1,215,000 1,837,080 1,726,855
Operation expense 1,650,000 2,488,750 3,591,993 3,376,424
EBITDA 850,000 1,073,750 1,146,132 1,124,795
D&A 300,000 300,000 300,000 300,000
EBIT 550,000 773,750 846,132 824,795
0.6 330,000 464,250 507,679 494,877
+D&A 630,000 764,250 807,679 794,877
-Capital expenditure (1,500,000) 120,000
-Add working capital (35,000) 35,000
FCF (1,535,000) 630,000 764,250 807,679 949,877
Present of CF (1,535,000) 572,727 631,612 606,822 648,779
NPV 924,939 >0
--> Accepted project
Year 1 2 3 4 5
Acquisition cost 500,000
Beginning Book Value 1,500,000 1,200,000 900,000 600,000
Depreciation expense 300,000 300,000 300,000 300,000 300,000
Ending Book Value 1,200,000 900,000 600,000 300,000