CAPITALBUDGETINGWORKSHEET 5

INPUTSHEET:USERENTERSALLBOLDNUMBERS

INITIALINVESTMENT CASHFLOWDETAILS DISCOUNTRATE

InitialInvestment= $450,000 Revenuesinyear1= $40,000 Approach(1:Direct;2:CAPM)=
Opportunitycost(ifany)= $0 Var.Expensesas%ofRev= 0% 1.Discountrate=

Lifetimeoftheinvestment 5 Fixedexpensesinyear1= 0 2a.Beta

SalvageValueatendofproject= $35,000 Taxrateonnetincome= 40% b.Risklessrate=

Deprec.method(1:St.line;2:DDB)= 1 Ifyoudonothavethebreakdownoffixedandvariable c.Marketriskpremium=

TaxCredit(ifany)= 0% expenses,inputtheentireexpenseasa%ofrevenues. d.DebtRatio=

Otherinvest.(nondepreciable)= 0 e.CostofBorrowing=
SALVAGEVALUE
Equipment $0 $0 $0 $0 $35,000 $0 $0
WorkingCapital $0 $0 $0 $0 $0 $0 $0

OPERATINGCASHFLOWS
LifetimeIndex 1 1 1 1 1 0 0
Revenues $40,000 $40,000 $40,000 $40,000 $40,000 $0 $0
Var.Expenses $0 $0 $0 $0 $0 $0 $0
FixedExpenses $0 $0 $0 $0 $0 $0 $0
EBITDA $40,000 $40,000 $40,000 $40,000 $40,000 $0 $0
Depreciation $83,000 $83,000 $83,000 $83,000 $83,000 $0 $0
EBIT ($43,000) ($43,000) ($43,000) ($43,000) ($43,000) $0 $0
Tax ($17,200) ($17,200) ($17,200) ($17,200) ($17,200) $0 $0
EBIT(1t) ($25,800) ($25,800) ($25,800) ($25,800) ($25,800) $0 $0
+Depreciation $83,000 $83,000 $83,000 $83,000 $83,000 $0 $0
Work.Cap $120,000 $120,000 $120,000 $120,000 $120,000 $0 $0
NATCF ($450,000) $177,200 $177,200 $177,200 $177,200 $177,200 $0 $0
DiscountFactor 1 1.12 1.2544 1.404928 1.57351936 1.7623416832 0 0
DiscountedCF ($450,000) $158,214 $141,263 $126,127 $112,614 $120,408 $0 $0

InvestmentMeasures
NPV= $208,626
IRR= 27.85%
ROC= 8.87%

BOOKVALUE&DEPRECIATION
 CAPITALBUDGETINGWORKSHEET 6

COUNTRATE

roach(1:Direct;2:CAPM)= 1

Discountrate= 12%

Risklessrate= 0.00%

Marketriskpremium= 0.00%

0.00%

CostofBorrowing= 0.00%

$0 $0 $0
$0 $0 $0

0 0 0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
0 0 0
$0 $0 $0
 CAPITALBUDGETINGWORKSHEET 5

INPUTSHEET:USERENTERSALLBOLDNUMBERS

INITIALINVESTMENT CASHFLOWDETAILS DISCOUNTRATE

InitialInvestment= $450,000 Revenuesinyear1= $40,000 Approach(1:Direct;2:CAPM)=
Opportunitycost(ifany)= $0 Var.Expensesas%ofRev= 0% 1.Discountrate=

Lifetimeoftheinvestment 5 Fixedexpensesinyear1= 0 2a.Beta

SalvageValueatendofproject= $35,000 Taxrateonnetincome= 40% b.Risklessrate=

Deprec.method(1:St.line;2:DDB)= 1 Ifyoudonothavethebreakdownoffixedandvariable c.Marketriskpremium=

TaxCredit(ifany)= 0% expenses,inputtheentireexpenseasa%ofrevenues. d.DebtRatio=

Otherinvest.(nondepreciable)= 0 e.CostofBorrowing=

Discountrateused=

WORKINGCAPITAL
InitialInvestmentinWork.Cap= $0

WorkingCapitalas%ofRev= 0%

Salvageablefractionatend= 0%

GROWTHRATES

1 2 3 4 5 6 7
Revenues Donotenter 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

FixedExpenses Donotenter 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Default:Thefixedexpensegrowthrateissetequaltothegrowthrateinrevenuesbydefault.
 CAPITALBUDGETINGWORKSHEET 6

YEAR
0 1 2 3 4 5 6 7
INITIALINVESTMENT
Investment $450,000
TaxCredit $0
NetInvestment $450,000
+WorkingCap $0
+Opp.Cost $0
+Otherinvest. $0
InitialInvestment $450,000

SALVAGEVALUE
Equipment $0 $0 $0 $0 $35,000 $0 $0
WorkingCapital $0 $0 $0 $0 $0 $0 $0

OPERATINGCASHFLOWS
LifetimeIndex 1 1 1 1 1 0 0
Revenues $40,000 $40,000 $40,000 $40,000 $75,000 $0 $0
Var.Expenses $0 $0 $0 $0 $0 $0 $0
FixedExpenses $0 $0 $0 $0 $0 $0 $0
EBITDA $40,000 $40,000 $40,000 $40,000 $75,000 $0 $0
Depreciation $90,000 $90,000 $90,000 $90,000 $90,000 $0 $0
EBIT ($50,000) ($50,000) ($50,000) ($50,000) ($15,000) $0 $0
Tax ($20,000) ($20,000) ($20,000) ($20,000) ($6,000) $0 $0
EBIT(1t) ($30,000) ($30,000) ($30,000) ($30,000) ($9,000) $0 $0
+Depreciation $90,000 $90,000 $90,000 $90,000 $90,000 $0 $0
Work.Cap $120,000 $120,000 $120,000 $120,000 ($120,000) $0 $0
NATCF ($450,000) $180,000 $180,000 $180,000 $180,000 ($39,000) $0 $0
DiscountFactor 1 1.12 1.2544 1.404928 1.57351936 1.7623416832 0 0
DiscountedCF ($450,000) $160,714 $143,495 $128,120 $114,393 ($2,270) $0 $0

InvestmentMeasures
NPV= $94,453
IRR= 20.04%
ROC= 9.56%
 CAPITALBUDGETINGWORKSHEET 7

BOOKVALUE&DEPRECIATION
BookValue(beginning) $450,000 $360,000 $270,000 $180,000 $90,000 $0 $0
Depreciation $90,000 $90,000 $90,000 $90,000 $90,000 $0 $0
BV(ending) $450,000 $360,000 $270,000 $180,000 $90,000 $0 $0 $0
 CAPITALBUDGETINGWORKSHEET 8

90000
 CAPITALBUDGETINGWORKSHEET 9

COUNTRATE

roach(1:Direct;2:CAPM)= 1

Discountrate= 12%

Risklessrate= 0.00%

Marketriskpremium= 0.00%

0.00%

CostofBorrowing= 0.00%

countrateused= 12.00%

8 9 10
0.00% 0.00% 0.00%

0.00% 0.00% 0.00%

 CAPITALBUDGETINGWORKSHEET 10

8 9 10

$0 $0 $0
$0 $0 $0

0 0 0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
0 0 0
$0 $0 $0
 CAPITALBUDGETINGWORKSHEET 11

$0 $0 $0
$0 $0 $0
$0 $0 $0
 CAPITALBUDGETINGWORKSHEET 5

Equity Analysis of a Project

INPUTSHEET:USERENTERSALLBOLDNUMBERS

INITIALINVESTMENT CASHFLOWDETAILS DISCOUNTRATE

InitialInvestment= $5,000 Revenuesinyear1= $0 Approach(1:Direct;2:CAPM)=
Opportunitycost(ifany)= $0 Var.Expensesas%ofRev= 0% 1.Discountrate=

Lifetimeoftheinvestment 5 Fixedexpensesinyear1= 0 2a.Beta

SalvageValueatendofproject= $0 Taxrateonnetincome= 0% b.Risklessrate=

Deprec.method(1:St.line;2:DDB)= 2 Ifyoudonothavethebreakdownoffixedandvariable c.Marketriskpremium=

TaxCredit(ifany)= 0% expenses,inputtheentireexpenseasa%ofrevenues. d.DebtRatio=

Otherinvest.(nondepreciable)= 0 e.CostofBorrowing=

Discountrateused=

WORKINGCAPITAL
InitialInvestmentinWork.Cap= $0

WorkingCapitalas%ofRev= 0%

Salvageablefractionatend= 0%

GROWTHRATES

1 2 3 4 5 6 7
Revenues Donotenter 10.00% 10.00% 10.00% 10.00% 0.00% 0.00%

FixedExpenses Donotenter 10.00% 10.00% 10.00% 10.00% 0.00% 0.00%

 CAPITALBUDGETINGWORKSHEET 6

Default:Thefixedexpensegrowthrateissetequaltothegrowthrateinrevenuesbydefault.
YEAR
0 1 2 3 4 5 6 7
INITIALINVESTMENT
Investment $5,000
TaxCredit $0
NetInvestment $5,000
+WorkingCap $0
+Opp.Cost $0
+Otherinvest. $0
InitialInvestment $5,000

SALVAGEVALUE
Equipment $0 $0 $0 $0 $0 $0 $0
WorkingCapital $0 $0 $0 $0 $0 $0 $0

OPERATINGCASHFLOWS
LifetimeIndex 1 1 1 1 1 0 0
Revenues $2,500 $1,500 $1,500 $1,000 $1,000 $0 $0
Var.Expenses $0 $0 $0 $0 $0 $0 $0
FixedExpenses $0 $0 $0 $0 $0 $0 $0
EBITDA $2,500 $1,500 $1,500 $1,000 $1,000 $0 $0
Depreciation $2,000 $1,200 $720 $432 $259 $0 $0
EBIT $500 $300 $780 $568 $741 $0 $0
Tax $0 $0 $0 $0 $0 $0 $0
EBIT(1t) $500 $300 $780 $568 $741 $0 $0
+Depreciation $2,000 $1,200 $720 $432 $259 $0 $0
Work.Cap $0 $0 $0 $0 $0 $0 $0
NATCF ($5,000) $2,500 $1,500 $1,500 $1,000 $1,000 $0 $0
DiscountFactor 1 1 1 1 1 1 0 0
DiscountedCF ($5,000) $2,500 $1,500 $1,500 $1,000 $1,000 $0 $0

InvestmentMeasures

NPV= $698.5
 CAPITALBUDGETINGWORKSHEET 7

IRR= 18.65%
ROC= 24.24%

BOOKVALUE&DEPRECIATION
BookValue(beginning) $5,000 $3,000 $1,800 $1,080 $648 $0 $0
 CAPITALBUDGETINGWORKSHEET 8

Depreciation $2,000 $1,200 $720 $432 $259 $0 $0

BV(ending) $5,000 $3,000 $1,800 $1,080 $648 $389 $0 $0
 CAPITALBUDGETINGWORKSHEET 9

COUNTRATE

roach(1:Direct;2:CAPM)= 2

Discountrate= 10%

0.9

Risklessrate= 8.00%

Marketriskpremium= 5.50%

30.00%

CostofBorrowing= 9.00%

countrateused= 0.00%

8 9 10
0.00% 0.00% 0.00%

0.00% 0.00% 0.00%

 CAPITALBUDGETINGWORKSHEET 10

8 9 10

$0 $0 $0
$0 $0 $0

0 0 0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
0 0 0
$0 $0 $0
 CAPITALBUDGETINGWORKSHEET 11

$0 $0 $0
 CAPITALBUDGETINGWORKSHEET 12

$0 $0 $0
$0 $0 $0
 CAPITALBUDGETINGWORKSHEET 5

Equity Analysis of a Project

INPUTSHEET:USERENTERSALLBOLDNUMBERS

INITIALINVESTMENT CASHFLOWDETAILS DISCOUNTRATE

InitialInvestment= $50,000 Revenuesinyear1= $40,000 Approach(1:Direct;2:CAPM)=
Opportunitycost(ifany)= $7,484 Var.Expensesas%ofRev= 50% 1.Discountrate=

Lifetimeoftheinvestment 10 Fixedexpensesinyear1= 0 2a.Beta

SalvageValueatendofproject= $10,000 Taxrateonnetincome= 40% b.Risklessrate=

Deprec.method(1:St.line;2:DDB)= 2 Ifyoudonothavethebreakdownoffixedandvariable c.Marketriskpremium=

TaxCredit(ifany)= 10% expenses,inputtheentireexpenseasa%ofrevenues. d.DebtRatio=

Otherinvest.(nondepreciable)= 0 e.CostofBorrowing=

Discountrateused=

WORKINGCAPITAL
InitialInvestmentinWork.Cap= $10,000

WorkingCapitalas%ofRev= 25%

Salvageablefractionatend= 100%

GROWTHRATES

1 2 3 4 5 6 7
Revenues Donotenter 10.00% 10.00% 10.00% 10.00% 0.00% 0.00%

FixedExpenses Donotenter 10.00% 10.00% 10.00% 10.00% 0.00% 0.00%

 CAPITALBUDGETINGWORKSHEET 6

Default:Thefixedexpensegrowthrateissetequaltothegrowthrateinrevenuesbydefault.
YEAR
0 1 2 3 4 5 6 7
INITIALINVESTMENT
Investment $50,000
TaxCredit $5,000
NetInvestment $45,000
+WorkingCap $10,000
+Opp.Cost $7,484
+Otherinvest. $0
InitialInvestment $62,484

SALVAGEVALUE
Equipment $0 $0 $0 $0 $0 $0 $0
WorkingCapital $0 $0 $0 $0 $0 $0 $0

OPERATINGCASHFLOWS
LifetimeIndex 1 1 1 1 1 1 1
Revenues $40,000 $44,000 $48,400 $53,240 $58,564 $58,564 $58,564
Var.Expenses $20,000 $22,000 $24,200 $26,620 $29,282 $29,282 $29,282
FixedExpenses $0 $0 $0 $0 $0 $0 $0
EBITDA $20,000 $22,000 $24,200 $26,620 $29,282 $29,282 $29,282
Depreciation $10,000 $8,000 $6,400 $5,120 $4,096 $3,277 $2,621
EBIT $10,000 $14,000 $17,800 $21,500 $25,186 $26,005 $26,661
Tax $4,000 $5,600 $7,120 $8,600 $10,074 $10,402 $10,664
EBIT(1t) $6,000 $8,400 $10,680 $12,900 $15,112 $15,603 $15,996
+Depreciation $10,000 $8,000 $6,400 $5,120 $4,096 $3,277 $2,621
Work.Cap $0 $1,000 $1,100 $1,210 $1,331 $0 $0
NATCF ($62,484) $16,000 $15,400 $15,980 $16,810 $17,877 $18,880 $18,618
DiscountFactor 1 1.10685 1.2251169225 1.3560206657 1.5009114738 1.6612838648 1.8387920457 2.0352669758
DiscountedCF ($62,484) $14,455 $12,570 $11,784 $11,200 $10,761 $10,268 $9,148

InvestmentMeasures
NPV= $47,928
IRR= 23.55%
 CAPITALBUDGETINGWORKSHEET 7

ROC= 60.12%

BOOKVALUE&DEPRECIATION
BookValue(beginning) $50,000 $40,000 $32,000 $25,600 $20,480 $16,384 $13,107
Depreciation $10,000 $8,000 $6,400 $5,120 $4,096 $3,277 $2,621
 CAPITALBUDGETINGWORKSHEET 8

BV(ending) $50,000 $40,000 $32,000 $25,600 $20,480 $16,384 $13,107 $10,486

 CAPITALBUDGETINGWORKSHEET 9

COUNTRATE

roach(1:Direct;2:CAPM)= 2

Discountrate= 10%

0.9

Risklessrate= 8.00%

Marketriskpremium= 5.50%

30.00%

CostofBorrowing= 9.00%

countrateused= 10.69%

8 9 10
0.00% 0.00% 0.00%

0.00% 0.00% 0.00%

 CAPITALBUDGETINGWORKSHEET 10

8 9 10

$0 $0 $10,000
$0 $0 $14,641

1 1 1
$58,564 $58,564 $58,564
$29,282 $29,282 $29,282
$0 $0 $0
$29,282 $29,282 $29,282
$486 $0 $0
$28,796 $29,282 $29,282
$11,518 $11,713 $11,713
$17,278 $17,569 $17,569
$486 $0 $0
$0 $0 $0
$17,764 $17,569 $17,569
2.2527352522 2.4934400139 2.7598640793
$7,885 $7,046 $15,294
 CAPITALBUDGETINGWORKSHEET 11

$10,486 $10,000 $10,000

$486 $0 $0
 CAPITALBUDGETINGWORKSHEET 12

$10,000 $10,000 $10,000

Initial Investment 450,000
Lifetime of the investment 5
Salvage Value at end of project 35,000
Revenues in year 1 40,000
Tax rate on net income 40%
Discount rate 12%

1 2 3 4
OPERATING CASHFLOWS
Lifetime Index 1 1 1 1
Revenues 40,000 40,000 40,000 40,000
-Var. Expenses 0 0 0 0
- Fixed Expenses 0 0 0 0
EBITDA 40,000 40,000 40,000 40,000
- Depreciation 90,000 90,000 90,000 90,000
EBIT (50,000) (50,000) (50,000) (50,000)
-Tax (20,000) (20,000) (20,000) (20,000)
EBIT(1-t) (30,000) (30,000) (30,000) (30,000)
+ Depreciation 90,000 90,000 90,000 90,000
- Work. Cap 120,000 120,000 120,000 120,000
NATCF (450,000) 180,000 180,000 180,000 180,000
Discount Factor 1.00 1.12 1.25 1.40 1.57
Discounted CF (450,000) 160,714 143,495 128,120 114,393

NPV = 210,776
IRR = 29.32%
ROC = -9.56%

BOOK VALUE & DEPRECIATIO

1 2 3
Book Value (beginning) 450,000 360,000 270,000
Depreciation 90,000 90,000 90,000
BV(ending) 450000 360,000 270,000 180,000
 5

1
75,000
0
0
75,000
90,000
(15,000)
(6,000)
(9,000)
90,000
120,000
201,000
1.76
114,053

OOK VALUE & DEPRECIATION

4 5
180,000 90,000
90,000 90,000
90,000 0