Capital InvestmentsStudent Template for BGA1 - 308 1 8-01-04
06-11 (Capital investment task)Projected Income Statement for New
ProductYear 1Year 2Year 3Year 4Year 5Year 6Expected Annual Sales of
New ProductExpected Costs of New Product:Direct materialsDirect
laborOverheadDepreciation on new assetSelling and administrative
expensesIncome before taxesIncome tax at 25% marginal rateNet
incomeNet cash flowCheck 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 is0for the last three years
it is $246,867************************************Your total cash
flow is0Because 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:Running(add rows as
necessaryCash FlowsBalanceto show your calculations)
Investment-----------------Year 1Year 2Year 3Year 4Use the above
box to identify the paybackYear 5point in years, months.Year 6Net
Present Value:PresentCash FlowsPV FactorsValueYear 1Year 2Year
3Year 4Year 5Year 6Working Capital ReturnSalvage ReturnTotal
Present ValueInvestmentNet Present ValueInternal Rate of
Return:Cash FlowsInvestmentYear 1Year 2Year 3Year 4Year 5Year 6 +
working capital + salvage returnInternal Rate of
ReturnProfitability Index(in the cell to the right calculate the
profitability index for the asset, enter the formula you used.)
Check number for Year 5 Net Cash Flow is 82,289.
Check number for Year 5 Net Cash Flow is 25,556.
Beginning Investment figure should be entered here.
