Capital Investment

Usia project 5 tahun

Project initial
Pada tahun 0 $ 10.000.000 net cash outflow
Project operation
tahun 1 $ 1.000.000 Net cash inflow (Total cash inflow- total cash outflow)
tahun 2 $ 1.000.000
tahun 3 $ 3.000.000
tahun 4 $ 8.000.000
tahun 5 $ 5.000.000
Project Disposal
Dana yang masuk dan keluar Ketika project dihentikan net cash in flow $ 800.000
Total yang dikeluarkan tahun ke 0 $ 10.000.000
Total netcash inflow $ 18.800.000
Surplus $ 8.800.000
Discounted Cash Flow (DCF) 20%

Project initial Cash outflow $ 10.000.000 $ 10.000.000

Project operation
Tahun 1 $ 1.000.000 $ 833.333
Tahun 2 $ 1.000.000 $ 694.444
Tahun 3 $ 3.000.000 $ 1.736.111
Tahun 4 $ 8.000.000 $ 3.858.024
Tahun 5 operation $ 5.000.000 $ 2.009.387
Disposal $ 800.000 $ 321.502
Total cash inflow $ 9.452.801
Defisit $ 547.199
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Usia project 5 tahun

Project initial
Pada tahun 0 $ 10.000.000 net cash outflow
Project operation
tahun 1 $ 1.000.000 Net cash inflow (Total cash inflow- total cash outflow)
tahun 2 $ 2.000.000
tahun 3 $ 6.000.000
tahun 4 $ 8.000.000
tahun 5 $ 5.000.000
Discounted Cash Flow (DCF) 20%

Project initial Cash outflow $ 10.000.000 $ 10.000.000

Project operation
Tahun 1 $ 1.000.000 $ 833.333
Tahun 2 $ 2.000.000 $ 1.388.888
Tahun 3 $ 6.000.000 $ 3.472.222
Tahun 4 $ 8.000.000 $ 3.858.024
Tahun 5 operation $ 5.000.000 $ 2.009.387
Disposal $ 800.000 $ 321.502
Total penerimaan selama umur proyek $ 11.883.356
Surplus $ 1.883.356
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Old (i.e., Existing) Machine
Purchase price of machine (7 years ago) $320,000
Accumulated depreciation to date $200,000
Machine removal expenses upon sale $2,000
Commission on sale of old machine 10% of selling price
Current disposal value (selling price) of machine, year 0 $80,000

New Machine Purchase

price of replacement (i.e., new) machine, year 0 $465,000
Machine installation cost $ 5,000
Testing and adjustments of new machine prior to new machine’s use $10,000
Expected life of new machine 4 years Depreciation method (ignore salvage value for tax purposes) SL
Estimated sales (disposal) value of equipment at end of four years $100,000
Salvage value assumed for tax-depreciation purposes $0
Estimated costs related to sale of asset at end of four years $95,000

Other Data
Expected increase in net working capital, year 0 $200,000
Expected reduction in net working capital, end of year 4 $200,000
Increase in annual cash sales because of new machine $1,000,000
Increase in annual cash expenses $733,333
Pretax operating cash-flow increase because of new machine $266,667
Marginal income tax rate (34% 6%) 40%
Corporate headquarters allocation percentage $0.025 per dollar of sales*
Additional pretax cash outlays, year 1 (employee training, etc.) $50,000
Employee pretax relocation expenses, end of year 4 $150,000
Weighted-average cost of capital (WACC) 10.00%

Initial Capital outlay

Data old Machine (OM)
Cash inflow $ 80.000
Removal expense ($ 2.000)
Commission (10%*$80.000) ($ 8.000)
Net cash inflow $ 70.000

Harga perolehan Lama $ 320.000

Accumulated Depre. Expense $ 200.000
Book value $ 120.000
Net cash for sale OM $ 70.000
Loss from sale OM $ 50.000
Tax saving 40%*50.000 $ 20.000

Data New Machine

Price -replacement $ 465.000
Installment Cost $ 5.000
Testing cost $ 10.000
Harga beli $ 480.000
Networking capital $ 200.000
Total $ 680.000
Cash dan tax saving $ 90.000
Initial capital outlay $ 590.000
 Years
0 1 2 3 4

Project Initiation
Net cost of new machine (a) $ (480.00)
Incremental net working capital $ (200.00)
Sale of old (existing) machine:
Pretax proceeds from sale of old asset (b) 70.00
Tax effect of sale of old machine (c) 20.00
Net initial cash outflow, after tax $ (590.00)
Project Operation
Cash revenues $1,000.00 $1,000.00 $1,000.00 $1,000.00
Operating expenses:
Cash items (d) 783.33 733.33 733.33 733.33
Depreciation (e) 120.00 120.00 120.00 120.00
Total operating expenses 903.33 853.33 853.33 853.33
Pretax operating income 96.67 146.67 146.67 146.67
Income taxes on operating income 38.67 58.67 58.67 58.67
After-tax operating income 58.00 88.00 88.00 88.00
Plus: Noncash expenses 120.00 120.00 120.00 120.00
After-tax cash operating income $ 178.00 $ 208.00 $ 208.00 $ 208.00

Project Disposal
Net working capital released $ 200.00
After-tax proceeds from sale of machine (f) 3.00
After-tax employee relocation expenses (g) (90.00)
Net cash flow, after tax, at project disposal $ 113.00

Net (after-tax) cash flows ($590) $178 $208 $208 $ 321