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Scenario Analysis

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I NEED HELP CALCULATING A FEW FINANCIAL SCENARIOS BASED ON THE DETAILS LISTED BELOW:

CAPITAL OUTLAY = $9 MILLION
CAPITAL EXPENDITURE DEPRECIATES (STRAIGHT LINE) OVER A 3 YEAR LIFE
20% MARGINAL TAX RATE
NET OPERATING PROFIT BEFORE TAXES & DEPRECIATION:
YEAR 1 = $4,500,000
YEAR 2 = $4,500,000
YEAR 3 = $4,500,000

1) NOPAT, CASH FLOW & ECONOMIC PROFIT FOR EACH YEAR
2) NPV
3) PRESENT VALUE OF STREAM OF ECONOMIC PROFITS VS. NPV
4) EVALUATION OF HOW OPPORTUNITY COST OF USING CAPITAL IS REFLECTED
5) HOW WOULD USING AN ACCELERATED DEPRECIATION SCHEDULE EFFECT NPV & DISCOUNTED ECONOMIC PROFITS?

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Solution Summary

All calulations in excel attached.

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  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
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