Finance 302 Exam

New Product Unit Sales (year 1) Selling Price Unit Cost Unit Gross Profit 2,000,000.00 2.25 0.79 1.46

Existing Product Lost unit sales Selling Price Unit Cost Unit Gross Profit Year

0 Revenue Loss on existing product COGS Gross Profit Equipment Inventory SG&A Lost Rent (opportunity cost) Depreciation EBIT Tax (35%) Less Accounts Payable Less Depreciation (1,400,000.00) (675,000.00)

1 4,500,000.00 (350,000.00) 1,575,000.00 5,725,000.00

2 5,310,000.00 (413,000.00) 1,858,500.00 6,755,500.00

(796,500.00) (2,700,000.00) (120,000.00) 140,000.00 2,248,500.00 786,975.00 189,000.00 (140,000.00)

(939,870.00) (3,186,000.00) (123,600.00) 140,000.00 2,646,030.00 926,110.50 223,020.00 (140,000.00)

(2,075,000.00) (726,250.00)

Free Cash Flow (FCF)

(1,348,750.00)

1,601,525.00

1,859,919.50

NPV (year by year) NPV (Short) NPV (Long) IRR MIRR (Short) MIRR (Long)

(1,348,750.00) $12,812,325.59 14,093,558.15 142% 49%

1,455,931.82

1,537,123.55 Payback Period (years)

isting Product 400,000.00 1.75 0.88 0.88 Year 3 6,265,800.00 (487,340.00) 2,193,030.00 7,971,490.00 4 7,393,644.00 (575,061.20) 2,587,775.40 9,406,358.20

Salvage Value Book Value Gain/Loss

280,000.00 280,000.00 280,000.00

5 7,763,326.20 (603,814.26) 2,717,164.17 9,876,676.11

6 8,151,492.51 (634,004.97) 2,853,022.38 10,370,509.92

7 8,559,067.14 (665,705.22) 2,995,673.50 10,889,035.41

8 8,987,020.49 (698,990.48) 3,145,457.17 11,433,487.18

(1,109,046.60) (2,819,610.00) (127,308.00) 140,000.00 4,055,525.40 1,419,433.89 263,163.60 (140,000.00)

(1,164,498.93) (3,327,139.80) (131,127.24) 140,000.00 4,923,592.23 1,723,257.28 310,533.05 (140,000.00)

(1,222,723.88) (3,493,496.79) (135,061.06) 140,000.00 5,165,394.39 1,807,888.04 326,059.70 (140,000.00)

(1,283,860.07) (3,668,171.63) (139,112.89) 140,000.00 5,419,365.33 1,896,777.86 342,362.69 (140,000.00)

(1,348,053.07) (3,851,580.21) (143,286.28) 140,000.00 5,686,115.85 1,990,140.55 359,480.82 (140,000.00)...